In the wake of last week’s ‘grilling’ of the Big Four bank chiefs, all three Australian financial regulators, APRA, ASIC and the ACCC will face a parliamentary committee for scrutiny on their performance and operation. The hearing is scheduled for 14 October, with ASIC first in the box at 8.30 am, followed by APRA at 10.45 and the ACCC at 2.15 pm – the total hearing time is less than eight hours. The hearings, again, will be public and the Chair of the Committee, Liberal MP David Coleman, has stated that “the hearings will give the Committee the opportunity to scrutinise the regulators on their performance and operation. In addition, the Committee will question the regulators on evidence arising from the Committee’s hearings with the four major banks.”
Mr. Coleman also noted, the different and distinct roles that the three regulators hold in relation to our finance and banking system. ASIC is responsible for conduct regulation and consumer protection, APRA is charged with prudential regulation (including financial system stability) and the ACCC is expected to promote competition and fair trade in markets to benefit consumers, businesses and the community.
The hearing will also be webcast. You can watch proceedings here:
Opinion: Hint – this mess will take longer than eight hours to fix
Just eight hours to review how the regulation of our banking and finance industry stacks up? You are kidding me, right? We are talking about the four most profitable banks in the world. We are talking about one of the major contributors to our GDP. We are also talking about regulation of an industry which has seriously and serially misbehaved for years. We are discussing recalcitrant behaviour by bank executives which, in any well-regulated economy, would land these people behind bars.
By any measure, along the way, our regulators have failed to protect the little guy. They have failed to uncover the wrong doing, relying instead on the ABC TV’s Four Corners, 7.30 and Lateline and Fairfax Media’s investigative teams to do the hard yards. And still the Abbott-Turnbull Government seems to lack any serious desire to support sufficient regulatory oversight, by first cutting $120 million from ASIC’s budget then replacing it with $127.2 million. In effect this government has simply reversed previous damage, as revealed by Paul Bongiorno in his article ‘The big bank query’ in The Saturday Paper.
When it comes to financial services, it’s time to ask of what our Government is so afraid?
Last week the CEOs of Australia’s largest banks attended a parliamentary hearing on banking practice. Each and every bank chief noted the pain that individuals had suffered due to their bank’s actions, and their sorrow for such individuals. Apologies were offered. But the fact remains that no single bank employee has lost their job, let alone been charged, for the long list of ‘misbehaviours’, perhaps even white collar crimes, revealed during questioning.
The CEOs indicated that they would be prepared to entertain the idea of a banking tribunal. This appears to be a compromise offered to the banks keen to accept anything as an alternative to a royal commission. But it won’t be enough to clean out our less than transparent finance industry.
Millions of ordinary Australians are continuing to have their retirement savings savaged by paying too much, for too little, when it comes to fees on superannuation. These fees remain the third highest in the OECD and can affect savings by as much as $80,000 over a lifetime. Add this greedy grab to the other lengthy list of banking sector problems – bank bill swap rate rigging, refusal to pass on interest rate cuts, refusal to pay out on insurance claims and dodgy financial advice – and it remains clear that our current system is a cartel which rewards the big end of town at the expense of those who can least afford it.
We need a royal commission to thoroughly investigate the practices of our banks and the performance of our regulators. Nothing short of this will suffice.
What do you think? Will one day of questioning the three regulators add much to the challenge of maintaining a fair and transparent banking sector?
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