Its brief is
to look in to Financial Services. Concentration will be on the banking sector
however insurance and superannuation funds have also been included.
Banks are an
easy and popular target. We don’t like them. Well, not quite because we tend to
think “our” bank is ok, it just the others we don’t like.
What annoys me
about the Royal Commission is the basis under which it has come about. The ALP and Greens have been going on about
the need for a Royal Commission for some time while the Government has been
rejecting the idea.
A
Parliamentary enquiry in to banks was looking likely when some (right wing) Nationals
started making noises about supporting the ALP/Green proposal. It was suggested
they were annoyed at the passing of Marriage Equality and were looking to
embarrass the Prime Minister who they held responsible for it.
The Prime Minister responded to the potential of such an enquiry by calling a Royal Commission.
By doing
this, he maintained control over the terms of what could be investigated and
added superannuation to the list. There is a strong, if not certain possibility
he did this to annoy the ALP who are the architects of the not for profit
superannuation system that dominates the retirement savings landscape.
The Government
wants to change the make up of Industry Fund Boards; the ALP doesn’t.
The end result
is a Royal Commission born out of Political point scoring. I am wondering if it
will be effective.
We have had
a raft of financial planning issues become public and much distress has been
caused to many as a result of what occurred in Bank owned Financial Planning operations.
We have had allegations
surface about money laundering as a result of improper transaction reporting
practices.
There have been, and continue to be allegations of swap rate manipulations. Some have
been admitted and settled while others are being defended.
In financial
services, we have numerous acts of parliament overseen by multiple regulators
Would more
be achieved, more quickly by having a proper independent investigation to
determine the effectiveness of the regulators, what is expected of them and
ensuring they are resourced correctly? From the outside looking in, it appears
they are almost exclusively reactionary when a proactive approach to provide leadership
and guidance to industry would be better.
Having an independent
review to determine a simple set of standard objectives for all lenders and deposit
taking institutions, investment managers, insurers and underwriters does not need
a Royal Commission.
Reviewing the
role of each regulator, determining their objectives and then deciding resource
requirements does not need a Royal Commission.
However, the
Royal Commission will achieve one objective.
Bank bashing
will be front and centre of our daily news and will be a leading hashtag on
Social Media.
Politicians
will get air time and will have another topic over which to have a race to the
bottom.
Employees in
Banks and other institutions will begin to feel undervalued and ashamed of what
they do.
And, will
anyone be better off for it – other than Lawyers and Politicians?
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