Banks in Canberra's sights as watchdog ASIC chair Greg Medcraft re-badged as a supercop.
by Michael Smith
Treasurer Scott Morrison referred to his father's career as a policeman several times when explaining the Coalition's proposal to bolster the corporate watchdog's abilities to take on the banks.
"The work of improving your cop on the beat never stops. As the son of a police officer I know that to be the case. You are always working on how you can do the job better," he says.
He also drew on his father's experience as a fingerprint expert back when there wasn't the "glitz and glamour of CSI" to explain why the Australian Securities and Investments Commission (ASIC) needs the latest technology to do its job.
After facing criticism for years for being asleep at the wheel, ASIC chairman Greg Medcraft has been rebadged as a corporate supercop and given the much-needed resources to do the job.
His tenure has been extended for 18 months and the regulator will have an additional $121 million in its coffers, funded by the banks. This includes $61 million for enhanced data analytics and surveillance capabilities, as well as $57 million for increased surveillance and investigation capacities over the next four years. The new money matches what former Prime Minister Tony Abbott stripped from ASIC's budget in 2014.
It is staggering how banks' behaviour has seemingly overnight become a key election issue. The issue has been brewing since October though when an out-of-cycle interest rate rise first raised the Treasurer's ire.
At the time the Australian Bankers Association began prioritising the repair job needed on the industry's reputation and the way it dealt with Canberra. That plan looks like it has failed.
But the timing of series of financial advice and life insurance scandals, which hit a crescendo last month when Westpac was added to ASIC's target list over alleged interest rate fixing, have fast-tracked banking ethics to the top of the political agenda just in time for an election.
The Coalition's package of measures are designed to counter Labor's push for a royal commission into banks. How effective they are remains to be seen, and there was no mention of the important issue of whistleblowers in Wednesday's news conference.
But it is a slap in the face for the industry although $121 million will hardly put a dent in the sector's profits. Shares in the four major banks were trading slightly lower on Wednesday but will not be affected by the government's package.
The cynics will point out the $121 million is the same amount slashed by Abbott two years ago. But Labor can equally be criticised for failing to nip the culture problem it says exists in the banking sector on its watch.
The winner out of all this is ASIC, which gets the resources it has long complained it badly needs. The banks cannot win either way, although the worst-case scenario for the industry is if Labor wins the election and they are the subject of a drawn-out royal commission.
Michael.smith@fairfaxmedia.com.au
Twitter @MikeSmithAFR
Read more: http://www.afr.com/brand/chanticleer/banks-in-canberras-sights-as-asic-chair-greg-medcraft-rebadged-as-a-supercop-20160420-goampq#ixzz46KWOFHjP
Follow us: @FinancialReview on Twitter | financialreview on Facebook