PM Turnbull Tribunal: a "stage-managed circus" exposes "cosy relationship" government enjoys with big four banks.
Bank rule-breakers should be named and shamed, but Labor and Greens push for royal commission
http://www.theage.com.au/business/banking-and-finance/bank-rule-breakers-should-be-named-and-shamed-but-labor-and-greens-push-for-royal-commission-20161123-gswck2.html
Bank employees who break the rules would be publicly named and shamed within five days under changes proposed by a parliamentary committee examining the big four banks.
And to further protect customers, the committee has suggested a series of other anti-climatic changes that would make it easier for new banks to be started, see an already-promised Banking and Financial Sector Tribunal established by July 1, 2017 and see the competition regulator tasked with examining competition rules in the sector every six months.
Inquiry heats up
NAB boss Andrew Thorburn has been questioned at the parliamentary banking inquiry over targeting customers and the financial planning scandal.
But Labor and the Greens labelled the government-dominated inquiry and report a "stage-managed circus" that exposed the "cosy relationship" the government enjoyed with the big four banks.
Other recommendations of the House Economics committee report, released on Thursday, included:
- Ensuring the banks pay for the cost of the new banking Tribunal.
- Consider whether new account switching tools are needed to make it easier to change banks.
- Allow ASIC to collect data about internal dispute resolution schemes in banks.
- Public reporting for the wealth management sector, managed by ASIC, to be set up by the end of 2017.
Liberal committee chairman David Coleman said in the report that the culture in Australia's financial sector must be reformed, that the banking sector was an oligopoly that used its power to protect shareholders and argued the big four banks had not always acted in the best interests of their customers.
"While significant changes have been announced that will better protect consumers, not enough has been done to force banks' senior leaders to change their behaviour. When consumers are continually let down, senior executives should go.""While they have remained financially strong, Australia's major banks have let Australians down too frequently in too many other ways," he said.
"We need to shine a bright and public light on senior executives when banks breach the trust of consumers," he told Parliament.
To that end, Mr Coleman also foreshadowed that bank chiefs will be hauled back before Parliament in the first quarter of next year, soon after the Reserve Bank appears on February 24, to keep up pressure on the big four banks.
Labor MP Matt Thistlethwaite said the inquiry was only held to head off a royal commission into the banks — which should still be held to examine illegal and unethical behaviour — and that "it has been a stage managed circus from its beginnings".
"The banks have ridden roughshod over their customers, the Australian people, and the Turnbull Government is providing cover to protect the banking industry from further scrutiny. Change in this industry only happens when you shine a light on those with power," he said.
"The one question the Coalition members' report fails to answer is why Australia should not have a Royal Commission into the banks? The allocation of 20 minutes of questions for each member once every year is simply not enough.
"It is clearer now than ever, a broader inquiry is needed."
Greens MP Adam Bandt said the hearings confirmed the big four banks believed there was nothing wrong with their business model and that it had "reinforced the need for a wide-ranging Royal Commission into the big four banks and the broader financial sector".
The report was released after the heads of Australia's big four banks appeared for a combined total of about 17 hours in parliament last month.
In those hearings, the big four banks' chiefs parried suggestions there were fundamental flaws in the banking system — despite numerous examples of bank bad behaviour emerging via whistleblowers and unhappy customers.
Prime Minister Malcolm Turnbull announced the hearings amid rising pressure from Labor and some MPs on his own side, to hold a banking royal commission.
He flagged the new banking tribunal as a low cost forum for people to seek redress for bad behaviour, and other probes into specific banking practices to head off a royal commission being called, last month.