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Banks tell Royal Commission: Don’t you change us—or else!

Banks tell Royal Commission: Don’t you change us—or else!

The banking royal commission is almost complete, and despite having barely touched the sides it has exposed that the banks previously touted as the best in the world, and wonderfully regulated, are in fact vast criminal enterprises which make their enormous profits from defrauding and gouging their customers. 

Citizens Electoral Council of Australia
Media Release Friday, 9 November 2018
Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: https://www.cecaust.com.au

Banks tell Royal Commission: Don’t you change us—or else!

The banking royal commission is almost complete, and despite having barely touched the sides it has exposed that the banks previously touted as the best in the world, and wonderfully regulated, are in fact vast criminal enterprises which make their enormous profits from defrauding and gouging their customers.

So what do the banks, the regulators, and the officials in the Morrison government who have been so badly exposed by this process intend to do about it?

Effectively … NOTHING!

The Australian people must not let them get away with this! Contact your MPs and Senators to demand they do their job and insist on the government committing to real change from this royal commission.

Here’s the response so far:

• The Australian Prudential Regulation Authority (APRA), the bank regulator, in its submission to Commissioner Kenneth Hayne’s Interim Report completely ignored his most important question: “Is structural change necessary?” APRA is acting like a disgraced regulator which knows it will get away with its cover-ups of the banks’ misconduct, because the government has no intention of forcing real change.

• The government of Scott Morrison and Josh Frydenberg has not waited for Hayne’s final report, but has pre-emptively reappointed APRA chairman Wayne Byres eight months early, just before his one and only appearance on the witness stand at the royal commission. This tells Hayne and his formidable counsels assisting Rowena Orr and Michael Hodge, whose relentless questioning has become feared by witnesses, that Byres has the government’s confidence, despite his obvious complicity in the banks’ abuses. As the CEC has declared, it is a corrupt attempt to pervert the course of justice.

• The Big Four banks have all used their submissions to Hayne’s Interim Report to effectively tell him to back off, or else. As James Frost reported 8 November in the Australian Financial Review, “The big four banks have launched a strident defence of vertical integration, lending benchmarks and executive bonuses in a direct challenge to a series of radical and probing questions posed by Commissioner Kenneth Hayne.” This is extraordinary arrogance by the banks. Not only have they outright rejected the need to break them up, but they won’t even accept changes to their executive bonuses that incentivise misconduct, nor to the lending benchmarks that have led to so much mortgage fraud! This is the same arrogance as the Wall Street banks displayed in December 2008 after they had blown up the financial world, but still demanded, and received, their full bonuses, with President Barack Obama’s approval! In their submissions the four banks also defended APRA and fellow regulator ASIC, which have done so much to boost their profits from gouging, stealing and fraud!

The banks also resorted to threats, that any real changes forced upon them will damage the economy. “Commonwealth Bank in its submission has warned the royal commission to tread carefully with its final recommendations around lending or risk a massive transfer of responsibility from borrowers to lenders”, Frost reported. “The banks have also pushed back on suggestions that would tilt the playing field too far towards the favour of customers [shock, horror!], warning of higher costs and reduced services.”

They attacked the suggestion of structural separation in particular: “NAB has warned of higher costs for financial services companies if Hayne was to proceed with a recommendation for structural separation…. Westpac, one of the few banks to push ahead with the vertically integrated model in which banks offer transactional and investment products, argued that conflicts occur everywhere and do not ‘arise from the structural features of a business’.” Westpac’s claim is such a blatant lie it’s laughable: if the banks weren’t integrated conglomerates of multiple financial services, there would be no profit for them in referring their customers to other businesses, and therefore no conflict of interest—the structure is the sole reason for the conflict of interests!

The chronology of these responses is important. APRA and the banks made their submissions by the 26 October deadline; the government reappointed Wayne Byres on 5 November. It’s a fair bet that the banks cc’d their submissions to the government to make clear they want business as usual, or found some other way to convey their wishes, and the government obliged by reappointing their favourite regulator Byres.

Fire up!

Now is the time to put the onus on your MP and Senators and demand to know, “What are you going to do about it?” Virtually all of the independents and minor parties on the cross-bench, and many back benchers in the Coalition and Labor Party, genuinely want to see financial reform and support policies like breaking up the banks.

But at the top of the major parties the banks exercise a huge amount of influence. The leaders of the parties are also influenced by the bureaucratic entities such as Treasury and APRA, which are completely captured by the banks through the infamous “revolving door” by which bankers end up running these departments, and departments officials end up with well-paying bank jobs.

The public must make it clear to MPs that business as usual will not be tolerated. This will give genuine MPs the backing they need to take on their party leaders and demand real change, including:

• Overhauling APRA and firing its current management;

• Jail terms for crooked bankers;

• And, the big one, structural separation—break up the banks!

Contact your MP today! You can find the contact details for your MP and Senators at this link: https://www.aph.gov.au/Senators_and_Members

Click here to order a free copy of the CEC’s new banking handbook, The Next Financial Crash is Certain! End the BoE-BIS-APRA Bankers’ Dictatorship: Time for Glass-Steagall Banking Separation and a National Bank.

Click here to join the CEC as a member.

Click here to refer others to receive regular email updates from the Citizens Electoral Council of Australia.

Last modified onFriday, 09 November 2018 01:59

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