Government finally concedes on need for banking inquiry

Font Size:

In an extraordinary backflip, Prime Minister Malcolm Turnbull announced a royal commission into the financial services sector this morning, labelling the move “regrettable but necessary”.

The announcement followed an email from the heads of the four major banks to Treasurer Scott Morrison telling the Government it was time to act “in the national interest”.

Key points:

  • The royal commission will investigate the banks, big and small, wealth managers, superannuation providers and insurance companies.
  • It will be chaired by “an eminent and respected ex judicial officer”.
  • A final report is due by February 1, 2019.
  • The estimated cost is $75 million.

The banks had previously argued that an inquiry into a series of scandals that has plagued the industry and caused a widespread lack of public trust was unwarranted and costly at a time when the sector was facing a raft of challenges.

However, they said this morning: “It is now in the national interest for the political uncertainty to end. It is hurting confidence in our financial services system, including in offshore markets, and has diminished trust and respect for our sector and people. It also risks undermining the critical perception that our banks are unquestionably strong.”

Mr Turnbull said the speculation about an inquiry could not be allowed to go on.

“It’s moving into dangerous territory where some of the proposals being put forward have the potential, seriously, to damage some of our most important institutions.”

Investors reacted quickly to the news. When trading opening this morning, CBA shares dropped 2.2 per cent, Westpac 1.7 per cent, ANZ 1.3 per cent and NAB 1.2 per cent.

The royal commission will run for 12 months although Mr Turnbull quickly qualified that timeline, saying “being realistic about this, royal commissions take longer than originally planned”.

Australian Bankers Association Chief Executive Anna Bligh described the royal commission as “an extraordinary and unprecedented step”.

“The banking and finance sector of Australia is one of our most important global industries,” she said.

“It is one of the most significant contributors to the global economy. It is too important to put in the hands of minor parties and fringe elements of the parliament.”

How do you feel about this announcement? Are you surprised at the PM bowing to bank pressure? Do you think there’s an ulterior motive?

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Royal commission findings have already been decided by PM

Turnbull launches ‘nothing to see here' banking royal commission.

The jig is up, time to bring banks to justice

‘This has been a systematic, long-term culture of breaking the law.'

Australians welcome royal commission with scepticism and humour

Australians have long called for a royal commission and now that they have one …

The letter that launched a royal commission into banking

Read the letter that launched a royal commission into the banking and finance sector.

Industry leaders have their say on the royal commission

The advice comes thick and fast after Turnbull's announcement.

Move surprising, until it all made perfect sense

Let's consider more closely the context of the PM's apparent 180 degree change of direction.

Written by Janelle Ward

18 Comments

Total Comments: 18
  1. 0
    0

    Of course there is an alternative motive. Labor have been pushing this for a long time, now suddenly when Turnbull gets the OK from the banks, we suddenly have this being done. LNP are desperate to try and win over the population for the next election, after the Queensland election was won by Labor. The banks feel more at ease with diddling the public under LNP.

    • 0
      0

      Of course it is all about the next election – to neutralise this as an issue. Noting Turnbull saying “being realistic about this, royal commissions take longer than originally planned”, one can forget about any outcomes before the next election – which may be in the next few months given the citizenship issues!

  2. 0
    0

    Looks like banks are now worth buying.

  3. 0
    0

    Ha ha, the commission will have no teeth. It is what the banks will allow!

  4. 0
    0

    Absolutely unnecessary.

    Yet again Turnbull and his cadre have fallen to the lefties.

    They certainly go to water at the hint of a whiff of grapeshot.

    Our Liberal party is destroyed and our most senior pollies have taken to their toes.

    • 0
      0

      Og gawd. Right-wing blindness from NaB. The Royal Commission is absolutely NECESSARY.

      “Our” Liberal Party? Not mine, mate. I don’t own vermin.

    • 0
      0

      I’d say they have fallen to their very own fascist far right controllers. The Liberals do well when they can keep those crazies in the closet.

  5. 0
    0

    Awesome. Glad to see the banks pulling the strings.

  6. 0
    0

    What a joke these people are treating the public like fools, the banks have given the go ahead and most likely approved the terms, you don’t have any enquiry unless you have some idea of the result the banks are treating the government like the fools they are, if the government what the real story they would be setting this up them selves and in control not being controlled

  7. 0
    0

    We need a Royal Commission into Turnbull, Abbott, Shorten, Bernardi, Hanson, Dastyari, Joyce, Katter, Trump etc etc etc …… gee the list is near endless.

  8. 0
    0

    Pure politics at play. Two by-elections in progress, both coalition members, some National Party members have threatened to cross the floor and join with Labor so Royal Commission announced by Turnbull. This will allow the government to set the parameters of the Commission which gives a measure of control.

    In reality, the banks can justify nearly all of the things that people have been screaming about, especially interest rates. The banks will claim that the market sets the rates and they have to go overseas to source funds. Fees will be another area where the banks will try and claim that they only charge out-of-pocket recovery and this will be hard to disprove.

    As regards the debacle over super funds lost by cowboys who were paid on commission and were mainly unsupervised, the banks will claim that those people have either left the employment or have been counselled. I think that the proposed Royal Commission will disclose very little about the banks but I have no idea how the wealth managers, superannuation funds or insurance companies will fare. Be careful what you ask for.

  9. 0
    0

    Who determines the terms of reference for this royal commission?
    Now that the banks have agreed it smells of a white wash

    • 0
      0

      Menzies was quoted as saying that a Royal Commission should only be called if the outcome was known. The government sets the terms of reference and chooses the Commissioner who will be, without question, an honourable man but one who can only work within the parameters set for him. In other words, a whitewash.

  10. 0
    0

    Chaired by “an eminent and respected ex judicial officer”? Lets wait and see who this “eminent” person is. Justice Hayden perhaps? And of course the real question will be whether or not there is a show or a genuine far ranging inquiry and tough rules after that which banks cannot avoid.
    I am yet to be convinced that what we have heard today is fair dinkum and the fact that a cost of $150 million was mentioned earlier in the day and now $75 million worries me that we may already have seen a watering down of this when the ink is still wet.
    I’ll believe this is above board when I see it and if the banks have called for a RC then I smell a rat. Are we seeing a cat and rat game?

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Centrelink – Services Australia

Are legally blind pensioners entitled to more money?

Rob is legally blind and wants to know how this will affect his entitlements. Q. RobHow do I go through...

Health

Mozzies biting? Here's how to choose a repellent - and how to use it

Mozzies biting? Here's how to choose a repellent (and how to use it for the best protection) Shutterstock Cameron Webb,...

Entertainment

Sir Bob Geldof on grief, fame and getting through it all

I've hardly started questioning Sir Bob Geldof before he is off on a long, sweary rant about everything he thinks...

Australia

Abandon Australia Day and choose the history we want to celebrate?

Australia Day is the anniversary of the arrival of the First Fleet in Australia. On 26 January 1788, 11 convict...

Community

Speaking up for the disappearing art of listening

Columnist Peter Leith is 91 and describes himself as "half-deaf and half-blind". But he sees and hears a lot and...

Beauty

Hyperpigmentation: How to tackle those tricky dark patches on your ski

There are plenty of great things about summer - sunshine, picnics and fruity cocktails immediately spring to mind - but...

Australia

Enthralling, dystopian, sublime: NGV Triennial has a huge 'wow' factor

Refik Anadol: Quantum memories 2020 (render) custom software, quantum computing, generative algorithm with artificial intelligence (AI), real time digital animation...

Australia

Where to eat, drink and play on Kangaroo Island

Australia's third largest island is an oasis of pristine wilderness, premium produce and hidden secrets ripe for discovery. Easily accessible...

LOADING MORE ARTICLE...