CBA head navigates interest rates, shonky insurance practices and bad financial advice.
Comm bank chief, Ian Narev, is paid twice the amount per week that the average Australian earns in a year. Yesterday he fronted a Parliamentary Standing Committee on Economics to answer allegations of bad banking practice.
The hearings were announced by Prime Minister Malcolm Turnbull in an attempt to combat repeated calls by the Labor Party for a Royal Commission into the banking sector. All the chief executives of Australia’s ‘Big Four’ banks will appear for approximately three hours each. Questions to Mr Narev came from 10 committee members who were given 20 minutes each and were split on party lines, with the Labor Party and Greens concentrating on the grievances of victims and whistle blowers.
Mr Narev defended the high credit card interest rates, stating that related debt was “the riskiest debt we could have”.
He also defended the high level of bank profits, stating that “You cannot have a positive economy unless banks are strong”.
He remained calm and collected during the questioning process and any sense of culpability for systematic failures in customer care, insurance or financial planning was difficult to discern. At one stage he stated that he felt the ‘pain’ of customers, but it was unclear how this pain might translate into in actual compensation.
As a counterpoint, research from the Australia Institute published by Fairfax Media yesterday reveals that two thirds of voters still want a Royal Commission and 77 per cent expect the big banks to pass on interest rate cuts in full. With bank profits forming nearly 3 per cent of Australia’s GDP, the Institute claims such profits result in higher costs for smaller banks and customers than if the competition was fair and effective.
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