10 reasons not to hold bank royal commission

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Last week, a Liberal Party insider told me a bank royal commission was “one major stuff-up away”. While this does not fit with the denials by both the Prime Minister and the Treasurer (who said the call for a royal commission was a “populist whinge”), there is no doubt the major banks’ refusal to pass on the recent 0.25% reduction in the cash rate to borrowers was fuel on the fire. The issue has become more politically charged since the election. Regardless of the merits of CBA’s $9.45 billion profit and Chief Executive Ian Narev’s $12.3 million take-home pay last year, the headlines did not help the banking industry’s case.

My view is that a royal commission would be counterproductive. This might come as a surprise to anyone who has read my original bank ‘whistle-blower’ book, Naked Among Cannibals. The sub-title was, ‘What Really Happens Inside Australian Banks.’ It gave a blow-by-blow description of how banks price products and set fees, and many of the questionable practices continue 15 years after the book was published. Notwithstanding, I set out 10 reasons why a royal commission is not required.

We have included a survey at the end of this article for you to provide your opinion, or use the comments section.

Public support for royal commission grows

Between 12 and 15 August 2016, Essential Media conducted a survey which included the question in the table below. The results suggest 64% support a royal commission, up from 59% in April 2016, and only 4% strongly oppose. Other data collected shows those most likely to support the royal commission were aged 65+ (70%) and those earning over $2,000 per week (70%).

Research on public support for a royal commission

Question: Would you support or oppose holding a royal commission into the banking and financial services industry?

Research on public opinion on royal commission

Source: Essential Media. For details on methodology, see full report.

The politics is worsening for the banks

When Malcolm Turnbull recently called for banks to pass on the full cash rate reduction, he again reminded the banks of their social responsibility:

“They operate with a very substantial social licence and they owe it to the Australian people and their customers to explain fully and comprehensively why they have not passed on the full rate cut and they must do so.”

Labor’s Bill Shorten clearly thinks he’s on a winner with the demand for a royal commission, hitting all the right political notes when he said:

“There is a culture in banking which puts the profits of banks, big profits, billions of dollars of profits, ahead of the national interest and interests of mum and dad mortgagees, small businesses and people with large credit card interest rate debts.”

Of course, the royal commission issue is not primarily about failure to pass on the rate cut. That simply shows how every headline affecting the banks triggers the debate. The original calls were driven by the Senate Inquiry two years ago which recommended a royal commission to investigate “forgery and dishonest concealment of material facts” in the financial planning arm of CBA. That was followed by the delay or denial by CommInsure in paying out insurance claims based on medical definitions that played out badly on ABC television’s Four Corners. A bank can never win an argument in the media about the definition of a heart attack while the victim lies in a sick-bed.

The election result made the likelihood of a royal commission even greater. Fairfax Media has done a headcount in the Senate and estimates that 43 of the 76 senators favour a royal commission, while the Government would control the numbers in the Lower House. However, a royal commission is an executive (cabinet) inquiry, not a parliamentary inquiry, and the government can ignore motions from either house.

Reasons a royal commission would be detrimental

While a royal commission may not have the rate cut issue in its terms of reference, the two issues have become joined due to the community expectations and bank culture issues which have resurfaced since the election. I have previously discussed these points in this article.

Here are some arguments against a royal commission:

1. There are already enough regulators, inquiries and committees

Banking is already the most regulated industry. Global and domestic regulators set rules across most aspects of banking including liquidity, capital, maturity mismatch, loan growth and dozens of other obligations. Banks are subject to monitoring and oversight by the Australian Securities & Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA), and, to a lesser extent, the Australian Competition and Consumer Commission (ACCC) and the Reserve Bank of Australia (RBA). There are many other interested government bodies such as the Banking Ombudsman, the Credit and Investment Ombudsman and the Superannuation Complaints Tribunal. The Financial Ombudsman Service Australia (FOS) is currently under a review with detailed terms of reference on the dispute resolution and complaint framework for the financial system.

The Financial System Inquiry reported on 7 December 2014 and the Government released its response on 20 October 2015. A Senate Inquiry into the performance of ASIC spent considerable resources investigating financial advice, and especially Commonwealth Financial Planning. The Future of Financial Advice (FoFA) legislation has been argued and changed and debated for at least the past five years. Allegations of misconduct by CommInsure led to intense public scrutiny. The Productivity Commission is studying the costs and benefits of vertically integrated financial advice, and bank CEOs are now required to appear before the House of Representatives Economic Committee each year to answer questions over a wide range of topics.

No doubt there are others. Many senior bank executives spend their careers bouncing from one crisis, public review, regulator meeting or inquiry to another. Policy or regulatory changes can be imposed on the banks without a royal commission, and major culture changes must come from within.

This week, Moody’s Investors Services reaffirmed Australia’s Aaa sovereign issuer rating, stating: “Australia’s monetary policy and banking regulation and supervision are vigilant and responsive to economic and financial conditions.”

2. Banks have many stakeholders and can’t keep everyone happy

Much of the discussion about bank ‘stakeholders’ revolves around the trade-offs between depositors, borrowers and shareholders. Other stakeholders include the government, the community and even staff. It’s a fine balancing act every time a bank makes a major decision.

The most vocal defence of banks in face of recent criticisms came from CBA’s Narev at his profit announcement. One of his slides was headed, “Depositors and shareholders fund our lending to borrowers”, and he noted that CBA has over 11 million deposit customers and only 1.9 million home loan borrowers. CBA has 800,000 shareholders, and almost every adult with any form of superannuation would have exposure to the major banks. The banks comprise a weighting of about 30% of all shares listed on the ASX. The one million SMSF trustees have a particularly heavy weighting to Australian equities and banks. Millions of Australians depend on the dividends from the banks, with over $4 billion paid annually to households by CBA alone. It is the country’s largest taxpayer and employs around 45,000 staff, while it contracts services from over 6000 small- and medium-sized businesses.

3. An exercise in bank bashing

Daily news stories of banks mistreating people does not help confidence and stability in our financial system, where the banks hold prime position. In an industry managing the money, loans and transactions of 20 million customers, there will inevitably be those that should have been treated better, and victims are always eager to tell their stories. Banks certainly need to be held accountable to these people, but the GFC showed how fragile the banking system can be. A regular news feed from a royal commission would undermine trust in the banks.

4. The majority of customers are satisfied with their bank

While banks cop a lot of public criticism (and I’ve voiced more than my share), Roy Morgan Research reports consumer banking satisfaction is close to an all-time high, and certainly far higher than levels a decade ago. While there will always be performance issues such as delays reaching call centres, the customer interaction experience in branches, internet, mobile, and telephone services is better than it has ever been.

5. Bank profits may have already peaked

Most bank share prices have fallen in the past 12 months as the market realises the golden days for bank profits are probably over. The regulatory requirement to hold more capital and liquidity, the passing of the low point in the cycle of bad and doubtful debts, the increasing competition for loans and deposits, and the gradually rising threat of fintech, especially in payments systems, all weigh on the sector’s outlook.

Recent bank profit results were mediocre. CBA’s full year rise disguised second half weaknesses, while ANZ’s cash profit fell in the last quarter. As banks struggle in coming years to hold their dividends and profits, it’s likely that claims of greed will become less vociferous. Having said that, it would clearly help if CEOs were not paid 153 times average weekly earnings. But the claims of ‘greedy banks’ may be more difficult to sustain as profits steady or fall.

6. A strong economy needs strong banks

As the table below shows, Australian banks are among the world’s most profitable, especially since the GFC of 2008. This is a double-edged sword: during times of economic stress it’s important to have strong banks that earn good profits to maintain their capital, but at what point has it gone too far? I believed when I wrote my book that in recovering from the recession of 1991, the bank culture went too far in promoting profit and shareholders at the expense of other stakeholders. I still see many examples of bank activities that should embarrass its executives, but a royal commission would do little to change that.

Large banks return on equity

Source: Reserve Bank Bulletin, March 2016.

There is also an argument that, with far more depositors than borrowers, there is a stimulatory impact on the economy from higher deposit rates, whereas low mortgage rates receive all the media attention. Mike Hirst, the Chief Executive of second-tier Bendigo and Adelaide Bank, explained the failure to pass on the full rate cut to borrowers by emphasising the need to remain competitive on deposits.

7. Vague notions of what a royal commission would achieve

We know banks can be bastards, but we don’t need a royal commission to tell us that.

There is nothing resembling a terms of reference to let the public know what questions will be addressed. Bill Shorten has talked about vertical integration, whistle-blower protection and remuneration structures, but these are issues already being addressed. Do we really want the satisfaction of a bruised and battered industry disliked by even more people and a range of recommendations about changing corporate culture? Do we want arrogant CEOs humiliated in public, like the George Pells of business? Do we seriously think most of the public will understand the complexities of banking and how decisions are made? The vast majority of people do not have a clue what bank capital adequacy is and the implications of tighter rules.

Inside the banks, they would steadfastly go about considering the needs of all their stakeholders. As bank profits struggle, there may even be more of a community desire for banks to remain strong and well-capitalised, and maintain their dividends, as pass on a rate cut.

8. It would be expensive and last for years

Initial estimates for the cost of a royal commission are $50 million over at least two years. While that is not a large number in the scheme of things, little more than four times Ian Narev’s remuneration last year, the far higher cost would be within the banks themselves. Consider the inquiry into Commonwealth Financial Planning (CFP): the project management and investigation has required a team of over 600 people and tens of millions of dollars in expenses inside CBA. Of course, CBA and CFP have a case to answer and brought many of these issues on themselves, but a royal commission would absorb incredible resources and management time when there is a major business to manage.

9. The recommendations may be bad for economic growth

Following two years of sad customer stories and revelations of bad culture, the only way a royal commission could create change is by introducing a new set of rules and regulations.

What might they look like? New taxes on banks, limits on credit growth, government bureaucrats involved in decision-making, formal controls over deposit and lending rates, directions to lend to certain industries, instructions on how to allocate resources? It could go anywhere.

And when these decisions are placed in the hands of the government rather than competitive forces (even in a strong oligopoly), unregulated industries prosper outside the banks. Taxpayers take the losses on inappropriate loans done for political purposes. Interest rates are set so that banks cannot attract deposits and loans are not priced properly. Bank money is used to prop up failing industries. When access to credit is compromised, business is stifled and good projects lost.

Many of these measures would limit economic growth. The banks already claim that ongoing political and public criticism reduces foreign investors’ appetite to invest here. The banking system is the plumbing through which the economy functions. Block the plumbing and we’re all in a mess.

10. Like democracy, what’s a better alternative?

The banking system and the banks are far from perfect, but it’s like the Westminster System and democracy. As Winston Churchill said: “Democracy is the worst form of government, except all those others that have been tried.” Be careful what we wish for.

Please take our survey on whether a royal commission into banking and financial services is required, linked here.

 

Graham Hand is Editor of Cuffelinks. He worked in the banking industry for 20 years including sitting on three bank pricing committees before becoming a consultant and writing for major publications, plus having two books published. He then moved into wealth management for 15 years.

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31 Responses to 10 reasons not to hold bank royal commission

  1. David August 18, 2016 at 1:09 PM #

    Really enjoyed the article, a nice counterbalance to current hyperbole. I would also add that banking is a much more complex business than the average person understands so the criticisms are based on simplified arguments.

    • Hilda Benjamin August 18, 2016 at 3:32 PM #

      “Simplified arguments”? OK – how about CBA Comminsure simply trying to reject/falsify legitimate insurance claims, putting vulnerable people under enormous added stress and suffering? Simple enough for you?

      • Rob August 18, 2016 at 3:43 PM #

        Yes, we know there have been some people who were not treated appropriately at some stage, but you are simply cherry picking to imply that all Comminsure clients have been mistreated, etc.
        The incidents raised, while clearly distressing for those involved, in reality only relate to a very small proportion of the total number of people who insure with Comminsure, and have never had a problem.

    • Rob August 18, 2016 at 3:37 PM #

      Absolutely agree, David.
      The average punter in the street (and far too many writers in the “popular” press) don’t have the faintest clue what a bank actually does.

      • Hilda Benjamin August 18, 2016 at 6:22 PM #

        “The average punter in the street (and far too many writers in the “popular” press) don’t have the faintest clue what a bank actually does.” And this is a good reason just to let the banks operate as they wish? Great logic!

        I think a lot of punters have a very sound grasp on what banks actually do: charge high fees, provide terrible services, make huge profits and treat customers with disdain.

      • Hilda Benjamin August 18, 2016 at 6:30 PM #

        “Not treated appropriately”? I think those people who battled to have a claim settled while also battling debilitating illness and disease might see it as a tad more than “not appropriately”! Spoken like a banker!

        “Cherry picking”..”imply that all”…? What do you base that on? Show me where “all” is implied?

        I put it to you that LOTS of insurance clients have had a terrible time when claiming on a policy sold to them. Go back and read the reports.

  2. Hugh Dive August 18, 2016 at 2:23 PM #

    Great article Graham bringing some balance into the frequently demagogic debate on banks

  3. Graham Hand August 18, 2016 at 2:43 PM #

    Some early comments, we will publish in full next week:

    – 1. Banks already have a number of organizations supervising them; and 2. Too costly for little gain.

    – Not sure what it would achieve and just be costly. Spend the money on an independent banking ombudsman to pritect the small people.

    – there is enough information in public domain to suggest there are systemic problems the few bad applea theory does not appear valid if it were banks would welcome commission. does anybody really believe aSIC or APRA are effective?

    – ASIC needs to get more funding and be actively supported to chase and prosecute the law breakers

    – I have seen first hand clients about to lose their homes who have already lost their retirement savings due to the banks involved with the agribusiness collapses. Only a royal commission can expose the fraud that went on and save client’s homes.

    – Waste of time and public resources

    – I agree with all the reasons listed above.

  4. Hilda Benjamin August 18, 2016 at 3:03 PM #

    Given that ALL the major banks have been caught treating customers very poorly, an investigation into them is way overdue. Especially regarding insurance – Enforceable Undertakings applied to ANZ, NAB, Macquaire, CBA (forgotten what Comminsure has been up to, have we?).

    Self regulate? Don’t make me laugh!

    The strong rejection of the banks and their industry body the FSC – yes, the outfit that wants legislation rushed through that excuses the big banks and insurance companies from adhering to compliance – underscores how much this is needed.

    Huge profits – and more to come if LNP tax cuts happen – while others in society are hammered into the ground (i.e. age pensioners, Newstart etc).

    Pull them out into the light and let’s have a good look at their underside.

    • Fred Oolish August 18, 2016 at 5:56 PM #

      Well said Hilda! For those who think that corruption and bad behaviour is not already ingrained, check out the recent RN Background Briefing podcast about ANZ bank exectitives manipulating inter-bank exchange rates for their own personal gain. It makes for sickening listening. Bring on. Royal Commission, and SOON!

  5. Damien August 18, 2016 at 3:03 PM #

    Good article Graham.

    I saw a poll on Fairfax in the last week asking if we should have a royal commission into banks and financial institutions. The results were something like 79% ‘yes’ and 21% ‘no’.

    The issue I have is that I have not seen one politician or journalist define the intended terms of reference for such a royal commission and therefore it is impossible to have an informed discussion as to whether it would be worthwhile.

  6. Michael August 18, 2016 at 5:21 PM #

    A sensible article. There will inevitably be unintended consequences.

    So what does the current negative perception of the public say about bank management and bank Board performance faced with this risk?

    1.Fact : Despite individual satisfaction at the customer level the “public” have a very negative view of the industry as a whole.

    2. Conclusion : The banks are poor at managing their public image.

    3. Fact : Shareholder returns in the longer term are being put at risk and this is what most individual shareholders are interested in.

    4. What questions should shareholders be asking faced with this fact?
    (a) As the CEO’s are the public face of the companies are Boards failing in their CEO selection process?
    (b) Is there sufficient focus on reputational risk at Board level and in remuneration policies? Remuneration policies based on average TSR’s of banks certainly do not provide the right incentives (and probably never have!)

  7. Fred Oolish August 18, 2016 at 5:40 PM #

    Your article rubbed me up the wrong way Graham, which is very much unlike how I normally react to your outstanding learned commentary.

    We desperately NEED a banking and financial services industry Royal Commission. The existing tame-puppie regulators are not capable of finding or fixing the corruption and rampant self interest in our industry.

    Let’s see how things dramatically improve when several banking and financial services executives are sentenced to some serious jail time.

    I’m lobbying every politician I meet to lobby and seek their support for a Banking Royal Commission.

  8. Dean August 18, 2016 at 5:52 PM #

    Stop sucking up to the banks… are they paying you guys a kick back ? have the Royal commission and get some real answers why they are screwing over the farmers..? and the others that they have rejected when they got ill..! Royal Commission to bring it all to the light!

  9. Graham Hand August 18, 2016 at 6:44 PM #

    Lots of comments in the survey. Here are a few:

    – Time to halt lack of ethics and dishonesty.

    – Graham covered the issues very well and clearly illustrated the potential downsides of a Royal Commission. With so many customers how can all be happy all of the time???

    – Many retirees depend on bank dividends for income which will inevitably fluctuate without bank – bashing which is just a popularised political stunt

    – While there may be many regulators now, many do little or nothing to ensure good customer focussed bank practice – e.g ASIC, APRA

    – We have had MORE than enough Bank Enquiries to know what is needed !!!.

    – major worth in banks yet some of the practise are giving the appearance of abuse of power and monopoly behaviour

    – If there’s nothing to hide … why not support it? They’re afraid they’re going to be finally exposed!! Bring on the Royal Commission!!!

    – As Morrison said “It’s a populist whinge” What will it achieve other than making people feel good about putting bank execs under the spotlight?

    – Conflating Interest rate changes with bad behaviour by banks clouds the issue. The PM and Treasurer indulging in their own bank bashing after the the cut did not get passed on, added to the mob.You would have expected the PM and investment banker to know better. The PM is boxing himself into a corner

    – The economy will benefit from a Royal Commission.

    – Existing regulation and oversight needs to be more strictly enforced. There is presently no incentive for the banks to significantly mend their ways.

    – Mr Hand’s analysis is excellent

    – The vast majority of Australians already have an interest in the banking industry, either directly as a holder of shares, or indirectly via their Super Funds who either would (or should) hold shares in the banks. Do they really want these holdings to be impacted adversely as might be the outcome of a Royal Commission.

    – Time we stopped be xenophobic about this and move forward.

    – I do believe that parliament should be more forceful in making the banks account for their actions and choices over a year, so the recently introduced requirement to “explain themselves” to the relevant parliamentry committee is a good ste p forward as long as that committee is not wimpy

    – Incompetent as they are, let the various regulatory overseers get on with it and keep the politicians out of it.

    – Mr Hand is just sticking up for his mates.

    – The only Jobs and Growth strategies that I can see from politicians is coming from a “Royal Commission” led recovery.

  10. Trypheyna August 18, 2016 at 8:40 PM #

    Being one of those ‘average punters’ on the street who lost everything – home, super savings etc in the GFC due to some seriously wrong actions from our financial planner, I would beg to differ at the comment ” (we) …don’t have the faintest clue what a bank actually does.”

    We know intimately, how seriously flawed and dangerous our current financial system is, and have had very close insights into what the banks actually do – we gave evidence at the Senate Enquiry at the end of last year!!

    We probably know this better than most people and I can tell you, you will be shocked to find out what is really going on, under cover. So many have their fingers in the pie, that’s why they don’t want it looked at by R.C..

    We are only two of hundreds of others who were also thrown to the wall, just from one financial planner.

    For the last 8 years I have done an incredible amount of research on this area and have been shocked to the core at what I have seen.

    Most definately we need a Royal Commission.

    In the same way that so much has finally come to light in the Royal Commission into Institutional Responses to Child Sexual Abuse, the same light must be thrown on the Financial Abuse/rape of so many good hard working Australians.

    This issue way bigger than just the banks.

    The whole system is seriously flawed and that is what needs to be looked into and changed ASAP

  11. Margaret August 18, 2016 at 10:41 PM #

    I definitely want a RC into banks and the financial sector asap as my family and I have been seriously cheated out of our life savings that we worked hard for by the bank and financiers.. The arrogance dishonesty and greed of the CEO’s is hard to bear. They literally get away with murder (people do destruct when all their resources have been stolen). The banks should be accountable businesses that do not rely on cheat and deceit to prosper. They should serve the people for fair remuneration, not exploit and rob their customers as is my personal experience. Those that have something to gain from not having a RC don’t want one and those that have lost trust through bank cheating want a RC. The numbers of those cheated by Banks is staggeringly high and $50 million is paltry compared to what has been gained by them dishonestly. There is a sickness in the banking system and financial sector that needs to be fixed and replaced by decency. Surely that is not too much to ask. Politicians are there to serve the people not banks.

    • Hilda Benjamin August 18, 2016 at 11:20 PM #

      Trypheyna and Margaret

      Total agreement: a RC that prises open he banks will be a great starting point as it is the banks that issue/sell the majority of investment/super/pension/insurance products that are used to strip people of their money.

      An RC into the BANKS (the scope should, I think, be narrow enough initially to facilitate deep analysis) would be a classical application of the 80:20 rule – ie 80% of the disease is caused by 20% of the companies.

  12. Phil August 19, 2016 at 6:45 AM #

    No-one seems to have a clear idea about how a Royal Commission could achieve anything useful. I can understand why people get cranky after seeing the latest “explosive” expose by the usual suspects (ABC, Fairfax). But being whipped into a frenzy by these often biased, manipulative (and sometimes factually incorrect) pieces of crusader journalism is not a sound basis for government policy or for the setting up of expensive taxpayer-funded investigations.

    If a RC could ensure that no bank employee ever again makes a mistake or does the wrong thing by their customer then that would be great. But there’s no way a RC could do that. The real outcome would most likely be more regulation, form-filling, box-ticking, compliance-monitoring etc. Banks already employ battalions of people who do nothing but that sort of thing. Adding to that bureaucracy won’t help. It does the opposite by forcing banks to focus more on compliance red tape and less on customers. It increases costs, thereby making it harder to pass on interest rate reductions or lower fees.

    As we have seen with the previous government’s FOFA (Future of Financial Advice) legislation, seemingly well-intentioned legislative/regulatory muscle can achieve the exact opposite of what’s intended. One aim of that was to make advice available to more people but it now seems that people are getting less advice than before because of the extraordinary amount of time advisers have to spend on compliance.

    There’s a good chance that a banking Royal Commission would make things worse rather than better.

    That’s not to say that the way banks operate is fine as it is. The way employees are remunerated, based on spurious, often meaningless “measures” is often absurd. But that would be the case across many industries, perhaps even the media industry. My point is that expensive “show trials” and regulation will not help.

    • Rob August 19, 2016 at 9:02 AM #

      Absolutely spot on, Phil

  13. Hilda Benjamin August 19, 2016 at 9:51 AM #

    Phil

    “But being whipped into a frenzy by these often biased, manipulative (and sometimes factually incorrect) pieces of crusader journalism is not a sound basis for government policy or for the setting up of expensive taxpayer-funded investigations. ” ?

    The documentation of people whose lives have been devastated, often ruined forever, is out there for all to see: the banks have been caught in dirty behavior countless times.

    “If a RC could ensure that no bank employee ever again makes a mistake or does the wrong thing by their customer then that would be great. But there’s no way a RC could do that.”?

    Its not the bank employees that are the root cause of the trashing of people’s lives – it is the senior management who set the remuneration policies, turn a blind eye to process compliance breaches and create/sustain the corporate cultures that perpetuate these behaviors. A RC can certainly focus on bank senior executive behavior (a very small pool compared to bank employees).

  14. Jim August 19, 2016 at 1:12 PM #

    a broad article Graham and I understand the costs issue however, while the Pollies control what action if any is taken against the banks we won’t get anywhere.

    At the moment there are too many incidents of people losing all their money when they should not have for serious action not to be taken.

    In my recollection, every Royal Commission has uncovered a lot more unscrupulous behaviour than we were aware of prior.

    Self regulation doesn’t work for large corporations as the $ is always uppermost in their minds.
    Its like putting a tub of ice cream in front of a person trying a diet – the ice cream gets eaten.

  15. kevin August 19, 2016 at 2:28 PM #

    I love banks,they fund my retirement.

    I dislike the. financial planning industry,so did my own.More money will be stolen at the point of a pen,than the point of a gun.

    The basis of a bank is to lend money out,the difference between the money they pay out in interest ,and money taken in is profit..They operate on a net margin of 1% of gross assets,hardly a huge margin.When CBA have 1 trillion in assets and make $10 billion in profit I will look forward to the huge amounts of complaints and whining.

    When I was young I borrowed 50k to buy a house,the rhetoric and hyperbole were exactly the same as today..Today that house is worth approx. $500K,tax free money for me.People keep telling me the bank makes all the money,no they don’t ,I do.

    When I borrowed money to buy shares the same thing happened,I made all the money,not the bank.

    I have had problems with banks (well individuals within banks).People make mistakes,they will not admit they are wrong.Problems that should have been solved with a ,Yes I can see where we went wrong ,ended up with the banking ombudsman.Four times that happened and four times they were told to refund money and pay $1000 for basically refusing to see the mistake.

    The bank is an entity,the individuals within the bank make mistakes.Some of them will steal money.

    .Some of them will have excellent customer service skills,some of them will be terrible.

    All in al I would be very poor without the bank,all they asked was I pay the money back,or at least pay the interest on the loan.

  16. John August 19, 2016 at 3:24 PM #

    Thanks for your gratuitous and off topic opinion of the financial planning industry Kevin. I’m sure the industry is equally pleased not to have you as a client.

  17. Graham Hand August 19, 2016 at 3:30 PM #

    Other comments recently added in the reader survey:

    – The banking system is already sufficiently regulated.

    – be an expensive exercise in futility

    – banks do not illegal actions (maybe immoral but not illegal)

    – remuneration policies strongly encourage unethical behaviour, and real changes have not been made

    – Too costly and wouldnt uncover anything that ASIC and other regulators don’t already know.

    – The banks have gone too far and need to be held to account.

    – Banks and business leaders in general need to face greater consequences than are currently in place when fraud and taking others for a ride are encountered but I am not convinced a royal commission is the way to do it

    – Prefer stable support for existing regulators

    – waste of time & money – outcome would be more regulation which makes things worse

    – Conflicts of interest between banks being the dominent providers of financial advice as well as the funds managements interest

    – I think we should let the multiple existing regulators do their job, rather than waste more tax payer dollars to duplicate that work.

    • Hamish Moffatt August 22, 2016 at 12:45 PM #

      If the banking system is already sufficiently regulated why are there still new scandals regularly? The estimated cost of $50m is nothing in the total federal government budget.

      The banks should not shy away from transparency.

      • Graham Hand August 22, 2016 at 12:47 PM #

        Thanks for the comment, Hamish. What do you think a Royal Commission will do to ensure there are no more scandals?

  18. Diane April 17, 2018 at 6:06 PM #

    Do you still say all this now that the RC has started? And what has come out so far? Scandal, corruption, disgraceful behaviour,but no one really surprised by these crooks

    • Graham Hand April 17, 2018 at 9:02 PM #

      Hi Diane. Mea culpa. I’ve worked in finance, banking and wealth management for 40 years and the revelations are far worse than I expected. It’s unbelievable that major companies lied to regulators and the senior executives simply answer “I’m uncertain” or “I don’t know” on how their businesses operate. Cheers, Graham

  19. Archie April 20, 2018 at 10:12 AM #

    So many “experts” claiming a royal inquiry was a waste of time and money, and that nothing new would be uncovered.

    The early shocking revelations for the public of the highly unethical behaviours and poor level of governance in the banks have strongly proven otherwise.

    I hope all these experts will be more humble and circumspect when developing and contributing their views in future on matters of public interest.

  20. Bazza May 1, 2018 at 7:55 PM #

    Graham,

    In hindsight this reads like utter guff and its unbeleivable how you draw such tangents e.g. Royal Commission would be bad for economic growth.

    Every single one of your ten items are so ficticious that this article reads like a comedy strip.
    Thank you for making my day.

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