While not quite a once-in-a-lifetime chance to right the wrongs of our financial system, Commissioner Kenneth Hayne did have a rare and important opportunity to prove to ordinary law-abiding Australian citizens that if you break the law, you cop the consequences.
Sadly, despite his frosty rigour during the hearings, it seems he has wimped out.
Yes, he has put forward 76 recommendations for improved practices in areas covering banking, super, financial advice, mortgages, insurance and regulation.
But when it comes to dealing with the executives who knowingly broke the law, time and time again, it seems he was not prepared to name these people or directly refer them for civil or criminal prosecutions.
Instead, he has referred 20 cases back to the ‘twin peak’ regulators, ASIC and APRA, for possible referral to the Director of Public Prosecutions: the very same regulators that the Commissioner himself found to be entirely missing-in-action while the country’s largest financial institutions were perpetuating the worst of these white-collar crimes.
These are the regulators whose willful lack of actions in enforcing the law the Commissioner had previously noted: “The conduct regulator, ASIC, rarely went to court to seek public denunciation of and punishment for misconduct. The prudential regulator, APRA, never went to court.
So what will change now? As Fairfax journalist Adele Ferguson notes in her commentary today, there are a couple of new commissioners at ASIC, but APRA has kept ‘the same old faces’.
So there we have it.
In a royal commission, truncated and under-resourced by a federal government dragged into having it, at least 20 instances of white collar crime have been revealed – all to the detriment of the consumer, while serving the greed of the institution and the individuals it employs.
The (potential) prosecution of these individuals and financial services institutions has been placed in the hands of the regulators who failed to act or to enforce the law to the degree necessary to support an ethical rules-based financial services system.
And just in case you think these ‘maybe’ prosecutions might happen any time soon, Ben Butler in The Australian today reports Professor Dimity Kingsford-Smith’s prediction that it may take 10 years to work through all the cases involving the ANZ, Commonwealth, NAB, AMP amongst others.
It seems crime does pay, after all. Just not for you and me?
What do you think?
