What you won’t read in the final report of the banking royal commission on Monday is legendary.
This is not in any way to underestimate the very fine job that commissioner Kenneth Hayne and his terrier senior counsellors have done.
But in this very personal opinion piece, I feel it is about time we spoke plainly about the likely findings and the probable repercussions.
There are four main takeaways from this commission and its findings: it was too short; the major miscreant, the government, will get off scot free; heads should roll, but probably won’t, and the little guy will continue to pay far too much for poor financial services.
How do I know this before the final report comes though? Because I don’t believe the fundamental illegal practices of our major financial institutions have changed much over the past 15 years. Let’s look at the above points and consider why.
The scope of the commission
Commissioner Hayne was never given enough time or resources to do a proper job. Then treasurer, Scott Morrison, resisted the call for this commission until he and former prime minister Malcolm Turnbull could no longer withstand pressure both within and outside Parliament. Given the Turnbull Government was dragged kicking and screaming to this commission, it set a totally unreasonable time limit, which meant that very few ‘real’ people could take to the stand with evidence as victims of criminal financial practices. Note I do not say ‘misconduct’ or ‘misbehaviours’. We are dealing with white collar crime here.
Worst offender overall = Federal Government
We will learn on Monday that financial regulatory bodies ASIC and APRA were too soft on the banks and financial institutions, such as AMP, which basically ignored their fiduciary duties and went hell for leather for profit. It is quite possible that some bank executives will face criminal charges.
But who should ensure the rules are obeyed? The regulators. Who runs the regulators? The Federal Government.
For years ASIC in particular has been using ‘enforceable undertakings’ to supposedly punish the financial organisations that broke the law. The result is that these institutions pay a token fine to charities and then treat it as a tax deduction. The regulators have not been ‘missing in action’ – they have fundamentally failed to do their job. And ultimately, the government of the day is responsible for this failure. This applies to the current government, whoever is PM, and previous Labor governments. ASIC and APRA need their own royal commission – or should be dissolved and a new, more effective financial regulator established in their place.
There are warnings today in the Fairfax media from Scott Morrison that the findings must not create an electoral battlefield. And that the worst thing of all would be if the flow of credit was to be compromised as a result of the commission.
He still doesn’t get it, does he?
His (and previous) governments are charged with managing financial regulations – it’s not that hard is it? Obey the rules banks, obey the rules. And if they don’t, they need to be taken to the cleaners on behalf of all the Janes and Johns whose savings are depleted because banks broke the rules.
So here’s to a government – any government – that can own up to this responsibility and protect all of us from the greed and avarice of people on million-dollar bonuses.
Do you think that ASIC and APRA need a royal commission? Are you confident that the finding of the banking royal commission will lead to appropriate action taken against banks and their ilk?