Royal Commission - Financial Services

[Ratts of Tobruk]

Labor will hold a Royal Commission into Banks and Financial Services if elected, and will support the Liberals if they propose one. The Greens have previously asked for one (and a National, John Williams, crossed the floor to support it), and Warren Entsch and the cross-bench support it too, so this will happen unless the LNP don't want it (and are re-elected).

The royal commission would conduct a two-year inquiry into the banking and financial services sectors, including superannuation funds, and cost $53m. Shorten said the sector had been rocked by a string of scandals that were “not isolated and one-off examples” but rather pointed to systemic problems in the industries. Shorten said calling a royal commission was “an important decision, it’s most certainly not made lightly”...

Bowen said the royal commission’s objectives would include considering how widespread illegal and unethical behaviour is, banks’ duty of care to consumers, how culture, ethical standards and business structures affect conduct, and whether Australia’s regulators are well equipped to identify and prevent illegal and unethical behaviour.

Recent bank scandals include the Commonwealth Bank financial planning scandal, allegations CommInsure may be routinely denying legitimate claims from sick and dying customers and an Australian Securities and Investment Commission (Asic) suit against Westpac for alleged rate rigging. On Thursday Shorten had refused to rule out a royal commission, prompting criticism from the treasurer, Scott Morrison, who labelled the idea a “reckless distraction”

My friends in the financial industry have said that there is plenty to be discovered if a RC happens, and looking at the explosion in 'financial services' over the last decade, particularly with more people taking an active interest in their Super/Investments then this seems like a very good idea. Any confidence lost in the industry short-term will be superseded by better practices long-term.

 

[Play by Numbers]

Been a long time coming. There is a shitstorm brewing at the moment over a previous scandal.

It's why Turnbull came out in criticism of the banks, and probably why Shorten has made the move. It could wedge the libs, but if they are smart, the party apart from a few scallywags should get behind it.

Theres a lot that has happened post 2008 that not many people know about, likewise, there is a lot of animosity over banking execs and lawyers lying to the senate and in a couple of cases, massively overstepping the bounds, both hiring private security to spy on senators and after one round of questioning an executive from a prominent bank threatening a group of pollies.

Anyway, some pretty big stories will probably break in the next week or two on the banking issue, so hopefully it drives bipartisan support, otherwise good on Labor

 

[Ice-Wolf]

It could wedge the libs, but if they are smart, the party apart from a few scallywags should get behind it.

It's already wedged them because they pretty much ruled it out yesterday.

 

[Play by Numbers]

It's already wedged them because they pretty much ruled it out yesterday.

Quite a few libs and Nationals support it. Reckon its only the guys like Morrison, who have probably been lobbied hard by the industry who are holding Mal back.

 

[Power Raid]

perhaps we should drop the limitations of s708 and allow retail to make their own decisions

 

[AM]

Frankly, I'd like it to be broader than merely financial services. Love to get a view on just how corrupt the commercial sector is generally.

 

[Power Raid]

Frankly, I'd like it to be broader than merely financial services. Love to get a view on just how corrupt the commercial sector is generally.

just hear a massive one with a big 4

I dare say they will be forced to close down their retail banking in Asia

 

[Ratts of Tobruk]

Quite a few libs and Nationals support it. Reckon its only the guys like Morrison, who have probably been lobbied hard by the industry who are holding Mal back.

Holding Mal back? Considering he has built his reputation largely off the back of financial industry skills, might he himself be worried that tarnishing the industry will make him look bad?

When I was younger I assumed MacBank was a respected institution, and people may not have had this view altered if they haven't asked around...

 

[Ratts of Tobruk]

The afore-mentioned Liberal MP Warren Entsch has pointed out, alongside five other Lib MPs, that senior Libs are once again making 'Captain's calls'.

Mr Entsch, 1 of 5 government MPs who supports a royal commission into the banking and finance sector... was "worried about senior colleagues ruling this out when we have an inquiry under way"....Liberal MP Bert Van Manen, a member of the committee holding that inquiry, due to report May 20, told Fairfax Media the committee should be allowed to run its course... Mr Turnbull promised no more captain's calls and the restoration of cabinet government...."It's all very well to say banks have learned from their mistakes and they will be nicer moving forward. But what about the sins of the past?" "To stand up and pre-empt the findings of a Senate inquiry; when I have been referring victims to this with an expectation of them being heard - they are shattered that senior members of the government have made this captain's call."

This does feed the impression that senior Liberals are protecting major donors.

 

[Power Raid]

The afore-mentioned Liberal MP Warren Entsch has pointed out, alongside five other Lib MPs, that senior Libs are once again making 'Captain's calls'.

This does feed the impression that senior Liberals are protecting major donors.

ASIC needs an overhaul. Its a basket case of box tickers with no Fn idea.

Get this right and perhaps the financial industry will have to lift its game. Its arguably the most incompetent government organisation nationally.

 

[GreyCrow]

Just an aside. Does anyone really believe the $53million figure?

 

[Ratts of Tobruk]

Just an aside. Does anyone really believe the $53million figure?

It's a large figure and we've just had a federal RC and the Victorian one on Domestic Violence. I imagine it's an accurate estimate. Do you think they'll need more resources or just commenting on the fact governments can never estimate accurately?

 

[GreyCrow]

It's a large figure and we've just had a federal RC and the Victorian one on Domestic Violence. I imagine it's an accurate estimate. Do you think they'll need more resources or just commenting on the fact governments can never estimate accurately?

Both. I think ( fuzzy) that the TURC went over spend didn't it?

 

[Northalives]

A national ICAC would be good, not a "star chamber" but a proper, dinkum Federal Independent Commission Against Corruption.

As for Turnbull's defence of the Banking sector that the Australian Securities and Investment Commission (Asic) and the Australian Prudential Regulatory Authority had sufficient powers to regulate the banking industry then the question must be asked, why, when the Banking sector is so "heavily regulated" are scandals occurring on what seems to be a regular basis? There must be something wrong with the regulators then.

Maybe its the shedding of 212 full-time positions, including significant cutbacks in proactive surveillance activities because of the $120 million cuts over 4 years contained in the 2014-15 budget? The Australian Competition and Consumer Commission (ACCC) lost 12.5% of it's staff as an "efficiency dividend" in the 2014-15 budget.

 

[Ratts of Tobruk]

As for Turnbull's defence of the Banking sector that the Australian Securities and Investment Commission (Asic) and the Australian Prudential Regulatory Authority had sufficient powers to regulate the banking industry then the question must be asked, why, when the Banking sector is so "heavily regulated" are scandals occurring on what seems to be a regular basis? There must be something wrong with the regulators then.

The argument mentioned in the Financial Review the other day was that Corporates claim it's 'just a few bad apples' and - worse - they say that ASIC can't regulate corporate culture. i.e. You can't stop the 'bad apples'. So they are trying to wash their hands completely of any responsibility now, in the past and in the future.

The link for the article is here, but I recommend plugging in "bad apples" and ASIC into your search engine instead. You'll be amazed how often these excuses have popped up over the years...

 

[Mead]

This comment applies equally to this royal commission, the union royal commission, the child sexual abuse royal commission and many many others.

Other than providing catnip for journalists for an extended period of time, giving victims false hope that Something Will Be Done (tm), and providing taxpayer funded support for the legal profession for years to come, what the hell is the actual point of a royal commission?

They cost stupid amounts of money, they never end, they hardly ever result in prosecutions and by the time they produce a report the political environment is usually so different to what it was when they started that that there's no serious interest in making any change.

Journos love them because they provide an easy source of stories for years to come, but they've become a poor excuse for actual reform.

 

[Contra Mundum]

ASIC needs an overhaul. Its a basket case of box tickers with no Fn idea.

Get this right and perhaps the financial industry will have to lift its game. Its arguably the most incompetent government organisation nationally.

When is the last time they had a successful prosecution - its bad

 

[moistie]

The argument mentioned in the Financial Review the other day was that Corporates claim it's 'just a few bad apples' and - worse - they say that ASIC can't regulate corporate culture. i.e. You can't stop the 'bad apples'.

Bad apples spoiling it for everyone else shouldn't be the basis for a Royal Commission, hey Tony? What's good for the goose......

 

[Ratts of Tobruk]

Royal Commissions are respected and considered useful by many people - particularly people in the effected industry or issue.

The fact there have been two RCs into Unions and the 2nd one from the current crop of Liberals seemed completely useless, says more about the current crop of Liberals than Royal Commissions. The 1st RC was what led to the creation of the ABCC. Abbott and Andrews were both involved, but instead of seeing it as useful for its outcomes they decided it was useful just for its process. They wanted to force people to give evidence about Unions once again, simply for the political impact it might have. That's why they called Shorten, Gillard and Rudd. That's why it was a waste of money and time.

Prosecutions aren't the point of a RC. The point is that the coercive powers force people to reveal how things are really happening; or else be at risk of perjuring themselves. The Liberals tried to focus on potential criminality in this last RC in order to try and make Labor look bad. There have so far been no successful prosecutions, just as there was none during the first Royal Commission into the Building and Construction Industry. But there were IR recommendations that were followed through on in the 2000s.

 

[CM86]

I think the best part of it being done via RC instead of ASIC, is the attention it will receive.
Give the general public a better idea of what's going on behind closed doors.

Maybe even fight the tide of hatred towards all unions that is being pushed so hard.
Unions: The big corrupt bullies, picking on the poor businesses.
Banks: The hometown heroes, providing jobs, strengthening the economy and saving kittens from trees.

 

[JoseMourinho]

Maybe even fight the tide of hatred towards all unions that is being pushed so hard.
Unions: The big corrupt bullies, picking on the poor businesses.
Banks: The hometown heroes, providing jobs, strengthening the economy and saving kittens from trees.

I'd think you'd find that Banks are much easier or just as easy as unions to target. I think the CBA/Macquarie/Westpac scandals had more discussion than TURC.

I could imagine that a Royal Commission on Financial Services would probably be more prominent than what was shown from the TURC.

 

[Gough]

So we'll see the PM staring earnestly into the camera every day, and calling all bankers corrupt, and criminal?

 

[CM86]

I'd think you'd find that Banks are much easier or just as easy as unions to target. I think the CBA/Macquarie/Westpac scandals had more discussion than TURC.

I could imagine that a Royal Commission on Financial Services would probably be more prominent than what was shown from the TURC.

I disagree.

Also, I'd say there are more people who feel they know and understand the corruption in unions, and how it happens, than they do with banks, the financial sector, or any lobby groups or anonymous investment companies.

 

[Power Raid]

A national ICAC would be good, not a "star chamber" but a proper, dinkum Federal Independent Commission Against Corruption.

As for Turnbull's defence of the Banking sector that the Australian Securities and Investment Commission (Asic) and the Australian Prudential Regulatory Authority had sufficient powers to regulate the banking industry then the question must be asked, why, when the Banking sector is so "heavily regulated" are scandals occurring on what seems to be a regular basis? There must be something wrong with the regulators then.

Maybe its the shedding of 212 full-time positions, including significant cutbacks in proactive surveillance activities because of the $120 million cuts over 4 years contained in the 2014-15 budget? The Australian Competition and Consumer Commission (ACCC) lost 12.5% of it's staff as an "efficiency dividend" in the 2014-15 budget.

I'm not sure what scandals you are referring to; are they events like fraud committed by an employee? If so, these are not what ASIC role is about.

 

[Play by Numbers]

This comment applies equally to this royal commission, the union royal commission, the child sexual abuse royal commission and many many others.

Other than providing catnip for journalists for an extended period of time, giving victims false hope that Something Will Be Done (tm), and providing taxpayer funded support for the legal profession for years to come, what the hell is the actual point of a royal commission?

They cost stupid amounts of money, they never end, they hardly ever result in prosecutions and by the time they produce a report the political environment is usually so different to what it was when they started that that there's no serious interest in making any change.

Journos love them because they provide an easy source of stories for years to come, but they've become a poor excuse for actual reform.

Really?

The Andrews government has agreed to implement all recommendations from the RC in domestic violence.

Likewise, the RC into child abuse has run parallel with a number of court cases and has resulted in significant and actionable exposure of wrongdoing.