Banking Royal Commission Final Report, February 2019

Understanding the Banking Royal Commission, Australia

In Australia, The rest by tony3 Comments

ORT_Logo  Breadtag Sagas ©: Author Tony,  6 April 2019

Understanding the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, February 2019.

Understanding Corporate Misconduct in General

Other articles on the malaise impacting Australia are Cry Me a River by Margaret Simons a 2020 update on the Murray-Darling Catastrophe and The Coal Curse by Judith Brett.

1 Background

1.1 General Relevance

When I was in New Zealand recently, which also has Australia’s banks, no one seemed interested nor had they watched the Royal Commission proceedings on TV that had us riveted in Australia. Now back in Australia I fear we are also in danger of losing interest now the circus is over.

By contrast, I think the findings of this Royal Commission are a once in a generation opportunity to understand the nature of major corporate malfeasance and how it should be dealt with almost anywhere.

In Australia, it is a once only opportunity to correct unfettered bad behaviour in the financial sector, with potential to extend this to the whole of corporate Australia and even to the government bureaucracy.

Although Australians were disgusted and appalled by the extent of the bad behaviour uncovered, I don’t think they realise that it is up to them to force the next step. They need to understand the remedy and why its implementation is crucial. The Royal Commission’s recommendations and its implementation strategy are vulnerable. Without strenuous public support and help from concerned organisations, the usual suspects lobby groups and vested interests will get their way as usual and water things down until they are ineffective.

The media and politicians have their own agendas regarding the Royal Commission. These are not necessarily sinister or manipulative, despite the implications of the impending Federal Election. However, agendas are more likely to impede than to facilitate reform.

The reform of the financial sector as the Royal Commission has outlined is a once only opportunity. If it is squibbed and not implemented fully, behaviour in the financial sector will deteriorate gradually to the levels that prompted the Royal Commission in the first place.

Why should it matter? Individuals in all democratic societies today feel powerless when confronted by corporate and bureaucratic systems. We are bamboozled, mistreated and occasionally defrauded. We put up with it because we can’t imagine anything better. Anyone who has dealt with Telstra, the NBN, received a robo-debt demand from Social Security, or dealt with any automated corporate telephone menu knows exactly what I mean.

1.2 History

Bad corporate behaviour in history is not a pretty topic, but from the 1980s things in the corporate sector began to change for the worse everywhere. These changes were interrelated with but not always interdependent with globalisation. Greed, excessive executive salaries, increasing income inequality, lack of institutional morality, profit above all else, and many other things became part of an insidious mix.

In Australia from 2013 scandals involving banks gradually snowballed. The Coalition Government (conservative) strongly resisted pressure to call a Royal Commission into the financial sector until the pressure became untenable and the more conservative coalition partners in the National Party demanded it. Even then, the four major banks wrote a letter to the Prime Minister on 30 November 2017 asking him to convene an inquiry in an attempt influence its direction.

The then Prime Minister Malcolm Turnbull established the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on 14 December 2017 under the Honourable Justice Kenneth Madison Hayne AC QC.

The Commission was required to work to a tight schedule and to produce an Interim Report on 28 September 2018 and a Final Report on 1 February 2019. Justice Hayne later refused an option to extend the inquiry to interview more witnesses, when it was offered by the new Prime Minister Scott Morrison, on the grounds that additional witness statements were unnecessary to the findings.

I suspect that the Royal Commission was set-up for failure, or at least an inadequate result, because of the near impossible time frame. If so the Coalition Government was to be disappointed by Commissioner Hayne, who set-up a superb team, focused on the purpose and refused to be distracted from it.

1.3 Media Reporting of the Royal Commission

Early on the media reported on the Commission in daily detail, whenever there were public hearings. The public and media alike became engaged with the demeanour of Kenneth Hayne and his ‘baby-faced assassins’ (with apologies) Rowena Orr QC and Michael Hodge QC.

Senior bank and other financial executives from Australia’s largest companies were quizzed and found wanting in terms of behaviour, legislative and possible criminal misconduct. They had to agree under pressure to humiliating admissions. Witnesses detailed heart-wrenching stories of poor treatment by financial entities at all levels that frequently bankrupted them. Early on a prominent Chairman of the Board and the CEO of two separate major institutions (AMP and CBA) were forced to resign because of what was revealed.

The last scalps came with the Final Report. The CEO Andrew Thorburn and Chairman Ken Henry of the National Bank of Australia (NAB) were forced to resign because of criticism from Kenneth Hayne on their attitude towards the Royal Commission and towards change in their organisations. Ken Henry was previously reckoned one of the ‘good guys’ in finance by the public at large.

Like everyone I would like to dwell on these issues too because they were wonderful and entertaining. It was pleasing to see executives of major financial institutions humiliated for failings that they were responsible for. It was important to reveal the depth of the misconduct and the way it impacted on the lives of ordinary people who believed they would be dealt with honestly and treated as human beings.

I may not be able to resist detailing some of this, but that is for another article. And on a more serious note, I think that summarising some of the case studies is necessary to remind us of how bad things had become in the financial sector.

2 Purpose

My purpose here is to analyse and explain in simple terms:

  1. What the Royal Commission into the financial sector concluded; and
  2. How these conclusions actually translate into a simple coherent hierarchy of recommendations that can actually fix the financial system.

The reason for doing this is that I don’t believe many people, including politicians and journalists, will read and analyse the Report for themselves or understand what it means.

The individual recommendations are very detailed and appear to be complex because they relate to an existing infrastructure of Australian law, to previous inquiries and reviews and to existing regulators.

Why am I competent to do this? My last paid position as an R&D consultant required me to translate the language of experts into language anyone could understand. I used to joke that my job was to translate what engineers said into English. Legalese can be equally impenetrable, but in terms of the Royal Commission Justice Haynes and his legal team are quite capable of writing in clear and compelling English. However, they also have implicit understandings and biases of thinking that may not be immediately obvious to the intelligent layman or ordinary Australian.

The case studies and the questioning of senior executives that were shown on TV deserve to be collected and edited by someone. And shown widely, either on YouTube or as a documentary. The material available online currently tends to be piecemeal and either too short or too long.

The video material, however, is fascinating and forms an important background to the findings of the Royal Commission.

The Banking Royal Commission

3 The Interim Report, 28 September 2018

This report is important in its own right and needs to be read in conjunction with the Final Report as it contains separate material, including the first series of case studies.

Commissioner Hayne begins the Executive Summary with:

The Commission’s work, so far, has shown conduct by financial services entities that has brought public attention and condemnation. Some conduct was already known to regulators and the public generally; some was not.

Why did it happen? What can be done to avoid it happening again? These are now the key questions.

What is slightly unusual for a Royal Commission is that, despite scandals over years, only part of the material was known to the public and even to the regulators.

Commissioner Hayne’s answer to Why did it happen? was crucial at this stage to his conclusions in The Final Report as to How to avoid it happening again?

His answer to Why? summarised is:

Too often, the answer seems to be greedthe pursuit of short term profit at the expense of basic standards of honesty. How else is charging continuing advice fees to the dead to be explained?

Banks, and all financial services entities recognised that they sold services and products. Selling became their focus of attention. Too often it became the sole focus of attention. Products and services multiplied. Banks searched for their ‘share of the customer’s wallet’. From the executive suite to the front line, staff were measured and rewarded by reference to profit and sales.

When misconduct was revealed, it either went unpunished or the consequences did not meet the seriousness of what had been done. The conduct regulator, ASIC, rarely went to court to seek public denunciation of and punishment for misconduct. The prudential regulator, APRA, never went to court.

These careful statements barely cover the litany of incredible misconduct on the part of the financial sector, but Commissioner Hayne was more censorious in his measured and insightful comments from the Bench.

Final Report 1 February 2019

4 Background to the Final Report, Media and Political Response

The Royal Commission conducted seven rounds of public hearings over 68 days, called more than 130 witnesses and reviewed over 10,000 public submissions. It also dealt with many emails and phone calls seeking help or information. This work does not cover the extensive research, advice and consultation necessary to investigate the sector before the incisive questioning in the public hearings.

Commissioner Hayne did not make or name any specific organisation or individual that should face criminal charges. Instead, he referred 24 instances of institutional and individual misconduct that might be criminal to the regulators for further action.

Some media feedback was that Commissioner Hayne was soft on the banks and should have made strong recommendations, such as those he made for Mortgage Brokers. Commissioner Hayne was very clear that the Commission had no mandate to recommend criminal prosecution. But some of the media and others wanted him to. Other media feedback was that because the regulators ASIC and APRA had performed poorly in the past it was remiss of the Royal Commission to use them again. Yet was the Royal Commission to redefine and restructure the entire financial sector?

Labor said they would implement all of Hayne’s recommendations and the Coalition said they probably would, once they’d looked at the matter closely. The Mortgage Brokers mounted a poor advertising campaign against the recommendations but obviously effective backroom pressure because both the Coalition and Labor caved in with indecent haste. They promised not to implement the strong recommendations on Mortgage Brokers. Jessica Irvine writes a scathing article about this on 27 February 2019, subtitled in the Canberra Times: History will judge Labor and the Coalition for squibbing it on mortgage broker reform. Similarly the Coalition has recently said that they’d ignore the recommendations on trailing commissions because accepting them would stifle competition another win for the mortgage brokers. The Coalition offered no evidence on this and Commissioner Hayne’s comments below on financial institutions warnings without supporting evidence and playing on generalised fears are very pertinent here.

The media and the politicians do not appear to have understood the findings or the recommendations of the Royal Commission. Hayne’s cold behaviour to Treasurer Josh Frydenberg at what would normally be a good news photo opportunity at the handover shows he didn’t want to be part of the normal political circus. But it may also partly be because he didn’t expect the government to treat his Report with appropriate gravitas.

Commissioner Hayne also specifically criticised the National Australia Bank in the Final Report:

NAB also stands apart from the other three major banks. Having heard from both the CEO, Mr Thorburn, and the Chair, Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learned. More particularly, I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly.

5 The Final Report Overview

Commissioner Hayne’s Final Report comprised 76 recommendations based on seven themes, but he also categorised his recommendations under subject headings, the key questions and within his detailed analysis sections. This was meant to show that the recommendations were a strategic hierarchy necessary to address each finding of the commission and would answer his How? question above.

The recommendations were also meant to be tied to the legal and administrative framework and to previous extensive inquiries into the sector. Hence the recommendations form a tight integrated framework to address the problems by the most efficient and effective means.

Hayne was in fact neither letting the banks off lightly, nor focusing unfairly on Mortgage Brokers. One way to explain this comes from a commissioned paper by Professor Sunita Shah of Cornell University entitled Conflicts of Interest and Disclosure (last document in Volume 3). Shah provides detailed evidence from university experiments and in real life examples from the corporate sector to show basically that self-interest (particularly financial gain) will always triumph over honesty and reasonable behaviour. What Commissioner Hayne is doing is trying to remove is these systemic barriers to moral or upright behaviour from the financial sector.

6 Further Basic Information

Let’s step back for a moment.

Much of the meat in understanding the report is contained in the introductory fifty pages of the Final Report (Vol 1). Indeed much of it in far fewer pages. The detail is in the remaining four hundred and fifty pages and in the other two volumes. The detail is important work, but it is unnecessary to a general understanding of the findings of the Royal Commission.

With regards to witnesses and case studies, Commissioner Hayne says:

To investigate let alone hear evidence about, every case would have taken many years. Choices had to be made. The cases … were selected as reasonably illustrative…

The Introduction (pages 1 to 18)

7 The Result in Overview

Commissioner Hayne begins by restating the central task, which paraphrased is whether any conduct by financial entities was misconduct or might have fallen below community standards or expectations.

He says:

The conduct identified … includes conduct by many entities that has taken place over many years causing substantial loss to many customers but yielding substantial profit to the entities concerned. Very often, the conduct has broken the law. And if it has not broken the law, the conduct has fallen short of the kind of behaviour the community not only expects of financial services entities but is also entitled to expect of them.

This is a distillation of the conduct referred to (above) in the Interim Report, from which everything else flows. He makes four observations.

8 Four Observations on Conduct

Commissioner Hayne continues (pp 1-3):

First, in almost every case, the conduct in issue was driven not only by the relevant entity’s pursuit of profit but also by individuals’ pursuit of gain … Providing a service to customers was relegated to second place. Sales became all important…

Rewarding misconduct is wrong. Yet incentive, bonus and commission schemes throughout the financial services industry have measured sales and profit, but not compliance with the law and proper standards. Incentives have been offered, and rewards have been paid … regardless of whether the person rewarded should have done what they did.

Second, entities and individuals acted in the ways they did because they could. Entities set the terms on which they would deal, consumers often had little detailed knowledge or understanding of the transaction and consumers had next to no power to negotiate the terms. At most, a consumer could choose from an array of products offered… There was a marked imbalance of power and knowledge between those providing the product or service and those acquiring it.

Third, consumers often dealt with a financial services entity through an intermediary. …

The interests of client, intermediary and provider of a product or service are not only different, they are opposed. An intermediary who seeks to ‘stand in more than one canoe’ cannot. Duty (to client) and (self) interest pull in opposite directions.

Fourth, too often, financial services entities that broke the law were not properly held to account. Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished. Misconduct, especially misconduct that yields profit, is not deterred by requiring those who are found to have done wrong to do no more than pay compensation. And wrongdoing is not denounced by issuing a media release.

9 Responsibility of Corporations

Hayne notes that the primary responsibility for misconduct lies with the entities concerned… their boards and senior management.

Because it is the entities, their boards and senior executives who bear primary responsibility for what has happened, close attention must be given to their culture, their governance and their remuneration practices.

10 Key Questions

Hayne acknowledges that Treasury in a written submission in response to the Interim Report identified three key questions and added a fourth (p. 5). Hayne agreed that these were the pillars of the policy responses to be made.

He summarises them (p. 43) as:

  • How can the law be simplified so that its intent is met?
  • How should the approach to conflicts of interest and conflicts between duty and interest change?
  • What can be done to improve compliance and the effectiveness of the regulators? And
  •  What more can be done to achieve effective leadership, good governance and appropriate culture so that financial services entities obey the basic norms of behaviour that underpin the proper regulation of the financial services industry?

His recommendations hinge on the answers to these questions.

11 Underlying Principles and General Rules (pp 7-19)

11.1 Principles

Hayne says the focus of this report must be on issues. He wants to deal separately with banking; financial advice; superannuation; and insurance. He also wants to add culture, governance and remuneration; and regulators. These are the six headings for detailed topics in the Report and also are one way of categorising his recommendations.

His general principles based on the key questions are:

  • obey the law;
  • do not mislead or deceive;
  •  act fairly;
  •  provide services that are fit for purpose;
  •  deliver services with reasonable care and skill; and
  • when acting for another, act in the best interests of that other.

These norms of conduct are fundamental precepts. Each is well‑established, widely accepted, and easily understood.

 The six norms of conduct I have identified are all reflected in existing law. But the reflection is piecemeal.

You can see he is narrowing things down, in a fiercely logical progression.

11.2 General Rules

The six norms of conduct I have identified support, and in some cases entail, some general rules:

  • the law must be applied and its application enforced;
  •  industry codes should be approved under statute and breach of key promises made to customers in the codes should be a breach of the statute;
  •  no financial product should be ‘hawked’ to retail clients;
  •  intermediaries should act only on behalf of, and in the interests of, the party who pays the intermediary;
  •  exceptions to the ban on conflicted remuneration should be eliminated;
  •  culture and governance practices (including remuneration arrangements) both in the industry generally and in individual entities, must focus on non-financial risk, as well as financial risk.

11.3 Defined Behaviours

In the next few pages Hayne defines what these mean.

Hawking means what it says. The prime case example was an insurance agent ‘cold calling’ a Downs Syndrome young adult and selling him life insurance. His father detailed emotionally the terrible impact this had on his son.

Breaches of the intermediary rule—behaviour based not on the client’s interests but on the intermediary’s own or a third party’s interests—is the reason the Commission recommended as it did on Mortgage Brokers.

Conflicted remuneration is similar but is based on legislation.

As Hayne says above, if corporate or individual financial interest is not aligned with that of the client, then it is basic human behaviour to pursue financial gain over morally or correct behaviour. The weight of evidence of the Royal Commission backs this assertion and a substantial part of the recommendations are targeted at preventing this conflict of interest (or conflicted remuneration). The recommendations for Mortgage Brokers are based on this presumption and hence unavoidable.

Grandfathering and trailing commissions are also mentioned. Without getting into the technical details the latter are not a practice that any reasonable person would think was fair. They involve an intermediary receiving an ongoing payment, frequently for years, for introducing a client to an entity, or introducing a client to an entity’s product. They are not transparent, without specific legal rules applied to each circumstance.

11.4 Making change carefully and simply

Treasury urged and Hayne agreed on the need for caution before recommending change. Change almost inevitably brings unforseen circumstances and often increases complexity.

Commissioner Hayne said in the Interim Report: adding a new layer of regulation will not assist. Treasury also indicated and Hayne agreed that legislative simplification [though desirable] can be a long and difficult task.

Nevertheless, it is time to start reducing the number and the area of operation of special rules, exceptions and carve outs [which pepper legislation over time, because of unanticipated consequences and successful lobbying by interest groups]. In itself removing special rules etc. is a large step towards simplification, yet not as difficult as legislative change cautioned against by Treasury, as the special rules etc. were often introduced piecemeal anyway. Commissioner Hayne also says it leaves less room for ‘gaming’ the system by forcing events or transactions into exceptional boxes not intended to contain them.

He says in the submissions received some entities also used this need for care in changing the status quo to indicate that there should be no change. However, he notes wryly, that there was never any detail or analysis presented for these ‘no change’ statements.

The dangers of change were particularly resisted whenever changes in the permitted forms of remuneration were suggested. Commissioner Hayne goes into a little detail here, but sums it up by saying categorically: Generalised fears of this kind should not be heeded.

12 Recommendations

(pp 19-50 and reiterated in the detailed sections pp 51-496)

12.1 Preliminary Comments

One must not forget that the Royal Commission had a formidable array of experienced legal staff, advisors and consultants. Specifically there were five counsel assisting the Commissioner, four other counsel, 23 solicitors, one special advisor, two special consultants and an administrative office staff of 27. Enabling services were provided by the Attorney General’s Department and various commissioned studies by an array of experts.

The recommendations needed to be related to existing legislation, regulatory bodies, previous inquiries and reviews, case studies and case law, in addition to other expert advice. There is no doubt Commissioner Hayne took everything into account when making recommendations that would prohibit bad behaviour and make misconduct difficult while attempting to simplify implementation as much as possible.

Criminal prosecution was outside his bailiwick, however, and he could not provide the money necessary to strengthen the regulators, to set-up a small new oversight body for ASIC and APRA, or to force government to accept and not water down the recommendations.

I am labouring this description because Australian governments in this century have developed the habit of burying reviews and reports or cherry picking a couple of items and ignoring the rest. Tax reform is one area that has often been touted as necessary but nothing happens. Ken Henry was well-regarded until the NAB debacle outlined above. As Treasury Secretary, he presented the Henry Report on Taxation Reform to the Rudd Government in May 2010. This was well-received by both sides of politics and by the well-informed commentariat, but it was largely ignored by subsequent Labor and Coalition Governments.

An election is now looming. With both sides offering different tax options, neither side of politics appears willing to contemplate overall tax reform.

The Hayne Royal Commission recommendations need fostering, promotion and protection from the financial industry’s vested interests in watering down those they don’t like. It doesn’t deserve the same fate as taxation reform.

I myself, like some of the press and others at the stage of the Interim Report, while impressed by what the Royal Commission had achieved in uncovering misconduct, wondered how they could pull everything together to achieve an end result that might be lasting. To my surprise and amazement the Final Report achieved a result well-beyond my expectations. I think that the recommendations are a tour de force.

12.2 The Recommendations

The legislation underlying the financial sector, which is and always has been regulated in Australia, is complex. Commissioner Hayne has striven to frame his recommendations with regard to the existing legal framework and to maintain simplicity wherever practicable. He has achieved it despite the inherent complexity in such a way as to be intelligible to all players, to make sense to legislators and to frame the recommendations in such a way as to make the changes needed practicable and achievable without shaking the financial industry from its foundations.

The underlying legislation comprises 32 Acts from the Commonwealth of Australia, three from three States and two from the UK. The 32 Acts from the Commonwealth of Australia comprise 26 Acts, six Amendments to Acts, and seven sets of Regulations.

The 76 Recommendations of the Hayne Royal Commission are presented in three different ways:

1 Hayne lists the recommendations under the six major headings of banking; financial advice; superannuation; insurance; culture, governance and remuneration; and the regulators. Within each of these headings are sub-headings of themes and it is very clear where each recommendation fits.

2 Hayne lists the recommendations under the five Key Questions (heading 10 above) and defines where each recommendation fits under each question.

3 Hayne provides a detailed discussion and explanation of each recommendation with reference to the specific legislation involved under the six major headings referred to in the summarised presentation two paragraphs above. This forms the bulk of Volume 1 of the Final Report.

The presentation of the recommendations, where they fit and why they are made, is rigorous and meticulous. Hayne has done the job for the lawmakers. Those who have a grasp in overview of these laws and are framing them on behalf of the legislators will not have much difficulty. No one can comprehend in detail 43 Acts, amendments and regulations and hence it would be a difficult task to ‘cherry pick’ or to omit some of the recommendations or to change them. What is presented is a comprehensive whole with potential to reform the financial system without creating new agencies or making difficult legislative changes. There is a desire to simplify some things over time, but the Commissioner has taken Treasury’s warning to heart because he agrees with it.

There is no time here to discuss the recommendations in detail. Some summaries are presented in the media but the 76 recommendations form a coherent and necessary framework to reform the financial sector.

13 Conclusions

The Royal Commission presents the findings produced by a team of 61 highly skilled people employed full-time and the part-time work of others, including witnesses. The Royal Commission has examined the workings of the financial sector and its failings, including misconduct. The Royal Commission cost the Federal Government many millions of dollars.

Watching the results as they unfolded and having read the Interim and Final Reports, it is almost impossible not to conclude that the money was well-spent. However, the media moves on from one thrill or event to another. Politicians and governments seem unable to focus on long term outcomes for the good of the country. They seem willing to expend public monies extravagantly but without regard for financial probity.

Australian governments are less responsive to public opinion than they used to be, particularly after elections. Government is frequently captured by lobby groups and vested interests prepared to pay lavishly to promote their own interests.

The banking industry and financial sector have made some changes in anticipation of the findings of the Royal Commission (as wryly alluded to by Commissioner Hayne). However, unless the pressure is maintained they are unlikely to continue with reform.

Federal Governments from the Howard era on seem to have little respect for reports and reviews, even those they commission themselves. Many worthy documents with recipes for improvement or reform have been consigned to archives and forgotten.

The main regulators, ASIC and APRA, despite past failings, are the recommended vehicles to police these financial reforms. Yet they will be unable to do this competently without adequate funding well above current levels. A small new oversight body for ASIC and APRA should be established (Recommendation 6.14) to assess the effectiveness of each regulator. It should consist of three part-time members and a permanent secretariat. Although small and relatively inexpensive its role is crucial. This new body is essential to ensure that ASIC and APRA do their jobs.

This stiffening up of the tasks of ASIC and APRA is essential, but funding and implementing are the tasks of government, as are minor legislative changes to give these organisations more teeth.

Labor seems more committed to implementing the Royal Commissions findings at the moment than the Coalition, but also seems to have fallen at the first hurdle. Labor and the Coalition have squibbed immediately when confronted by the Mortgage Brokers’ rather pathetic advertising campaign, but intense lobbying (see Jessica Irvine above). The Coalition has also squibbed on trailing commissions. These three things are the most egregious of the systemic failures revealed by the Royal Commission. How will both Labor and the Coalition respond to more sophisticated lobbying by the industry?

I suspect and the above demonstrates that the Royal Commission’s recommendations will not survive as a whole. Yet, they must if reform of the financial sector is to proceed.

I don’t have the answer. But I think a concerted campaign of some sort outside of government and the financial industry will be essential or this once in a lifetime opportunity for change will be lost. I suspect that a consortium of agencies and some form of popular pressure will be required. It will need to be a lengthy and consistent campaign to avoid the potential for backsliding before all the ‘i’s are dotted and the ‘t’s crossed.

I sincerely hope that others think the same.

Key words: Banking Royal Commission, misconduct, banking, superannuation, insurance, financial services, Kenneth Hayne, Rowena Orr, Michael Hodge, Jessica Irvine, bad corporate behaviour, greed, corporate profit, dishonesty, criminal prosecution, unpunished, rewards, incentives, culture, governance, leadership, remuneration, obey the law, conflict of interest, grandfathering, trailing commissions, lobbying, Andrew Thorburn, Ken Henry, Anna Bligh.

Further information

This is a rather long article at around 12 pages. However, it is trying to make sense of the Banking Royal Commission Interim and Final Reports which come to around 2,700 pages.

Political Parties Squibbing Mortgage Broker Reform

In case you missed Jessica Irvine’s article linked to above, it is entitled Mortgage brokers must be celebrating Labor’s backflip 27 February, 2019 published in the Canberra Times, Sydney Morning Herald and Age. Only in the Canberra Times was there the sub-heading History will judge Labor and the Coalition for squibbing it on mortgage broker reform. Thanks to the sub-editor because it summarises the story perfectly.

If you don’t know Jessica Irvine or her mentor Ross Gittins, I reported on them in Ross Gittins & the Paris Terror Attacks. Nevertheless, the article above is excellent.

Further Press

I am saving myself for another article but provide the following as context for what I have been saying above.

Overviews of the Royal Commission at three stages

1 Katherine Murphy All you need to know so far The Guardian 20 April, 2018.

2 Banking royal commission key findings from Kenneth Hayne’s interim report The Guardian 29 September, 2018.

3 Amy Remeikis Key points and recommendations of the banking royal commission report The Guardian 4 February, 2019.

Criticisms of the Report

The ABC Australia provides a comprehensive critique on the softness of the Royal Commission’s recommendations in certain areas. As you should realise from reading to this point, I think these criticism are not only grossly unfair but are superficial and completely fail to understand the recommendations of the Royal Commission.

Anna Bligh who is mentioned in the story may need explanation. She is the ex-premier of Queensland and was also a supposed ‘good guy’ in the opinion of many. She is currently the CEO of the Australian Bankers Association. She seemed to have compromised her principles by defending the indefensible early on during the Royal Commission. Although she has modified her tone lately.

The Three Key Players

Kenneth Hayne

The Honourable Justice Kenneth Madison Hayne AC QC Wikipedia

Patrick Durkin Just who is the banking royal commissioner Justice Kenneth Hayne? The Australian Financial Review, 8 February 2018.

Rowena Orr QC

Rowena Orr

Michael Hodge QC

Michael Hodge

Michael Roddan’s Book

I was unaware when I posted this of Michael Roddan’s Excellent book which was published on 2 April. I will now probably not write the exciting article about the detail of the bad behaviour uncovered. Although only a couple of chapters in I’d recommend to you Micheal Roddan The People vs The Banks Melbourne University Press, April 2019.



    1. Author

      Frightening thought! My campaign will need to be revised considerably. Targeting cross-bench politicians is perhaps the only way forward.

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