Peter Martin writes in The Conversation (4.2.19) about the findings of the Hayne Royal Commission into the banking and finance sector, suggesting that the Commissioner’s recommendations will require an abrupt about-turn from bank executives and the federal government.
‘Treasurer Josh Frydenberg was glossing over history when he said the final report of the banking royal commission “endorsed many of the themes and individual reforms the government is currently pursuing”.
‘In fact, on coming to office in late 2013, his government – through Finance Minister Mathias Cormann – did the opposite.
‘Instead of extending provisions in the law that financial service providers act in the “best interests” of their clients, it tried to remove them, pressing Senate independents to have them excised from the at-the-time unimplemented Future of Financial Advice Act.
‘It argued there would be greater certainty if advisers were merely required to fulfil a number of specific requirements rather than to act in the overall best interests of their clients.
‘It’s a checklist approach Justice Kenneth Hayne dismisses, saying it has encouraged advisers to pursue a “good enough” outcome “instead of the best interests of the relevant clients or members”.’
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Hayne’s failure to tackle bank structure means that in a decade or so another treasurer will have to call another royal commission
Andrew Linden and Warren Staples write in The Conversation (5.2.19) about the Banking Royal Commission’s findings, arguing that, while many of Justice Hayne’s recommendations are laudable and abolutely necessary, they are not sufficent to end the regular cycle of appalling misconduct and inquiries into the financial sector.
‘Every 10 to 15 years it’s the same. Ever since financial deregulation in the 1980s we’ve had a finance industry scandal followed by an inquiry, a quick fix, and a declaration that it shouldn’t happen again.
‘In the early 1990s there were royal commissions into the A$1.7 billion Tri-continental/ State Bank Victoria collapse, the A$3.1 billion State Bank of South Australia collapse and the WA Inc collapse which explored the interrelated activities at Rothwells bank, the A$1.8 billion collapse of Bond Corporation and the A$1.2 billion siphoned from Bell Resources.
‘A decade later in 2003 Justice Owen reported on the A$5.3 billion collapse of Australia’s largest insurer HIH.
‘And now, bang on schedule, we have Kenneth Hayne delivering the final report of a royal commission into systemic misconduct in banking, superannuation and financial services industry to a government that voted 26 times against holding it.
‘… While heads might roll in yet another round of internal investigations to fix bank culture, it is wise to remember that as Adele Ferguson observed ANZ’s internal investigation of the Opes Prime collapse left the bigger governance lessons “unlearned”.
‘Directors and senior executives of failed companies continue to live charmed lives.’
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