Bribery and Corruption !

The one thing that emerged crystal clear from the banking Royal Commission was that the action of the banks to inflate their profit margins by both illegal and underhand methods was not impeded by the regulatory authorities tasked with preventing this happening.

The Federal regulators - ASIC, ACCC, The Tax office and the banking regulator are government instrumentalities which are on the public payroll.   Just as much as the banks behaved like a bunch of criminals, the watchdogs stayed in their kennels and did nothing to prevent this criminality from happening.

A few obligatory heads rolled in the banking industry as a result, but mostly the outcome was the imposition of fines which hurt the shareholders much more than the banking hierarchy.  Very little seems to haver been done to separate the close association which has emerged between the regulated - and the regulators.

We now learn that a very cosy arrangement exists between the entire business community and the regulators who are supposed to keep them on the straight and narrow - and that mostly takes the form of a gift exchange that is little short of outright bribery and corruption.   Meetings between the two often take the form of a meal in which exotic food is accompanied by the best of wine and spirits and regulators are often guests in the corporate boxes that companies sponsor at leading sporting events.

Christmas is the gift season and many companies reward the regulator with whom they have contact with expensive bottles of wine or company logo branded wireless headphones.  It is not unusual for companies under the regulators watch to pay air fares to industry conferences or influence an airline seating upgrade to win favour.

Gifts and hospitality are not given for reasons of altruism.  Implementing the laws that regulate business involves the interpretation of those laws by an individual and the closer the relationship the better the outcome for the company.  Hence the custom has evolved of wining and dining both regulators and politicians in the hope that both legislation and its implementation will be lightly enforced.

All these regulating authorities maintain gift and hospitality records but do not regularly publish them.  The ATO encourages staff to " politely decline any offer of gifts or hospitality " where this can be done without causing offence.  This is much more heavily controlled within the Police force.  A Police officer in receipt of a gift from the public is in danger of dismissal and this is considered a necessity to stamp out criminality.

Many people remember the recession in 2008 which rocked the securities market.   Housing mortgages were packed into instruments called " Derivatives " and accorded triple A security listing by the industry that rated investments.   When this investment crashed those regulators simply walked away whistling Dixie - and today precisely the same firms are putting their stamp of approval on investment security ratings.

That banking Royal Commission will have only done half its job unless it severs the cordial "scratch my back and I will scratch yours " relationship between the regulators and the regulated.  The fact that banking degenerated into the unhealthy mess this Royal Commission revealed is mainly because the banking regulatory industry failed to do its job,.

Nothing will really change until the regulators are called into account - and made to be fully accountable for their actions.