In 2008, in order to avoid a meltdown of the global financial system the United States bailed out Wall Street with a $700 billion bailout package. This bailout has actually continued into the trillions over the last ten years. This injection of tax payer funds back in 2008 has continued propping up of the system and ensured the world didn’t enter into a second great depression. This was an important point in world history and many commentators said that the bailout would create better banking behaviour and standards; other commentators said the poor practices of the past would continue. Sadly, the latter was correct.
In the final hours of the House of Representatives Economics Committee banking review into Australia’s financial system and the practices of our big four banks last week we learnt that not only have the unethical practices of the financial sector continued after 2008, we also learnt that Malcolm Turnbull’s cover-up committee, had been secretly colluding with the Treasurer about the need to avoid a Royal Commission.
This was a most damning admission which shows Mr Turnbull has no regard for ordinary Australians who feel let down by their bank. Clearly he is only interested in protecting the banks. When later questioned about the need for a Royal Commission Mr Turnbull said that a Royal Commission could in fact be damaging. The question is damaging to whom?
The unprecedented profits and practices of our financial institutions and what we have heard from customers paints a dark picture of the sector.
During the committee hearings the banks openly admitted to widespread failures and problems within their organisations with examples of fraudulent conduct, professional misconduct, illegal or unethical behaviour, overcharging on fees, inappropriate financial advice and staff performance incentives designed to cross-sell bank products. In other words, the banks have for some time been preying on customers. In fact, many customers, only after confronting their bank regarding inappropriate bank behaviours, have already received “undisclosed” compensation amounts but were forced to sign confidentiality agreements in order to receive this compensation. Clearly this is an admission by the banks that there is wrong doing within their industry.
One after the other the committee heard apologies from the CEO’s on behalf of what has occurred and on behalf of their employees. Apologies on behalf of their employees for engaging in serious misconduct and professional incompetence that includes forging customer’s signatures and selling them dodgy financial advice.
The apologies and promises to make things right have been provided before. But nothing has ever changed.
I sincerely hope that the industry is better than what we have heard so far and what has been revealed by customers over a long period of time. I hope it is not an industry of multi-faceted corruption, greed and manipulation causing harm and suffering to clients.
Ultimately, Australians who allege they have been ripped off by the banks or provided poor financial advice deserve a Royal Commission to investigate how widespread the scandals and inappropriate schemes extend across the financial and banking industry.
Clearly there is a difference between a “Low Cost” Tribunal and a “Royal Commission” into Australia’s banking organisations.
The victims need to be heard, justice needs to be served and future clients certainly need to be protected.
A Royal Commission should be provided the opportunity to reveal what has occurred. The questions that must be asked include. Why haven’t these financial services sector employees been held accountable? Further to this, why are they still employed at the banks if they have engaged in inappropriate activity that has harmed customers? These are crucial questions that require greater investigation and expert analysis.
Now Mr Turnbull has agreed to more investigation but not an investigation as rigorous as a Royal Commission.
It is certain. An ad-hoc committee that is only permitted to quiz our banking CEO’s for a mere three hours each is not an investigation which befits this issue.
According to the Prime Minister, a tribunal would provide a “speedy response” to customer complaints against the Banks. But this appears to be just a reactionary response of a Prime Minister who does not want a Royal Commission on his watch into an industry which his Party garners much of its political donations.
The fact is, only a Royal Commission can resourcefully delve into past practices and hear from Australian’s who are alleging criminal misconduct. Only a Royal Commission can investigate the sector with rigor and transparency. It can summon witnesses and take evidence. It can authorise police to apply for search warrants and witnesses who fail to appear may face criminal charges.
The Prime Minister can institute a Royal Commission tomorrow and investigate the sector once and for all.
Labor will continue to fight for a Royal Commission so the many thousands of Australians who have lost their homes, retirement savings and businesses, who weren’t given the opportunity to have their say at the committee, get a voice.
If we want a banking and financial services sector which we can be proud of then we must start with a clean slate. Only a Royal Commission can offer justice to victims.
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