Banking royal commission: Richard Di Natale calls for bank execs who commit crimes to face jail

The Australian 2:29pm August 8, 2018

Michael Roddan

Greens leader Richard Di Natale has called for “lengthy criminal sentences” for banking executives who commit crimes and slammed the conflicts of interests that reward bankers for charging fees to customers where no service has been provided.

Speaking outside the Federal Court in Melbourne, where the royal commission is grilling National Australia Bank executives who charged millions in fees to superannuation customers in return for little or no benefit, Mr Di Natale said there was “a cancer at the heart” of the banking and financial services sector.

 “The foundations are completely rotten,” Mr Di Natale said.

The press conference came just moments after royal commissioner Kenneth Hayne raised the prospect that National Australia Bank may have committed a crime by taking money from superannuation customers to which it was not entitled. The royal commission has been examining why it took NAB so long — 10 months — to decide whether it should compensate customers for a breach where it charged fees for general advice services despite there being no financial adviser attached to a superannuation customer to provide those services.

Mr Hayne asked NAB former superannuation executive Nicole Smith whether taking money from customers to which the bank was not entitled was a crime. Ms Smith disagreed.

“Where a crime has been committed, of course, these are individuals who should face lengthy criminal sentences,” Mr Di Natale said. “People who behave in the way that NAB executive described are being rewarded under the current structure,” he said.

“Let’s not make the mistake of thinking this is about a few bad apples. This is an institution where there is a massive conflict of interest,” he said. “The very nature and structure is one that rewards that sort of behaviour.”

Mr Di Natale was joined by Greens Treasury spokesman Peter Whish-Wilson and Melbourne MP Adam Bandt, who today launched a policy to “break up the banks” to “protect customers and improve stability”.

The Greens policy would allow financial services firms to perform only one of four different functions: taking deposits and lending, managing assets and superannuation, writing insurance, or engaging in complex and sophisticated financial products — broadly, ‘‘investment banking’’.

The Greens policy would also shift powers to monitor consumer protection from the corporate and banking regulators, ASIC and APRA, to the competition regulator, the ACCC.

The royal commission isn’t expected to deliver recommendations until next year. The 2014 Murray inquiry into financial services and a Productivity Commission inquiry stopped short of recommending any sort of breakup of financial institutions.

“Our regulation of the financial services and of the big banks has failed,” Mr Whish-Wilson told reporters. “There’s been a lot of evidence that our regulators both across ASIC and APRA have been captured. The resolution that’s been put forward by the Treasurer this week and Minister O’Dwyer … this is going to put them firmly under the doona,” he said.

“We haven’t had a regulator for eh trustees in superannuation. Under our model the ACCC will be taking on that role,” Mr Whish-Wilson said.

“This whole model has been set up over the years to make profits. At what point is too much profit too much. That’s what’s at the heart of the royal commission,” he said.

“Malcolm Turnbull said this is not capitalism on trial. Well, in a sense it actually is.”