There seems to be a vast chasm in how consumer protection laws are interpreted in regard to the value of the faulty item. If you have the misfortune to buy a dud toaster what are called " the three R's " kick in uncompromisingly. Refund - Replacement or Repair - and that is entirely the choice of the customer.
But if the complaint involves the second biggest purchase item in the average customer's life - after the purchase of a home - the law becomes astonishingly vague. Car manufacturers present a united front in denying that " three R " solution. They procrastinate and often deny any fault exists but usually have their dealer carry out a repair, with the car providing no service to its owner while that is taking place. In some cases the complaint is ongoing because the problem persists.
Such was the case with Ford vehicles from 2015. Cars fitted with " Power shift transmission " brought complaints of extreme clutch shudder, noisy transmission and jerky acceleration, making them hard to drive. Ford told its customers that this was not their fault and were reluctant to provide solutions. The complaint lingered on for ten months and some owners received more than one clutch replacement. The Federal court found that Ford's conduct was serious and that the car owners suffered economic and non-economic harm by way of inconvenience, stress and frustration. The court fined Ford ten million dollars.
Considering the size of the car industry, that ten million dollars probably represents about one dollar per car for the Ford output during that 2015 year. In other words, a rap across the knuckles - with a feather. The public have long called for what are termed "Lemon laws " to apply to car manufacturers. They want the right to hand back for refund where a new car is consistently faulty and that has been dodged by our politicians.
It is not hard to see why ? We used to have a car manufacturing industry in this country and a lemon law would have been anathema to its profits. We were begging them to stay because of the jobs they provided, and our politicians were not about to rock the boat with onerous consumer protection laws.
That was then - and this is now ! The world car trade competes for our custom and the proverbial boot is on the other foot. From time to time a car manufacturer finds that a component proves faulty - as was the case with that PST transmission - and must restore trust by fixing the fault - and that can be expensive. Without adequate consumer protection laws, that loss is suffered by the retail customer.
There should be protection in place and the world car industry must accept that obligation when they decide to market their product in this country. There is now absolutely no valid reason why cars should not be included in consumer protection laws.
Saturday, 28 April 2018
Friday, 27 April 2018
Blackouts !
There is growing concern that we may lack sufficient power generating capacity to avoid load shedding - and the inevitable blackouts that will cause - in summer demand peaks unless Liddell power station remains on the grid past 2020. Present plans call for it to close by that date.
Last week we had a major bushfire in Sydney's south-west and it seems that came perilously close to causing a major blackout city wide. That would have been a disaster. The trains would have stopped, isolating people and shutting down commerce. The lack of traffic lights would have created chaos on the roads and the entire hospital system would have had to depend on generators to keep life preserving equipment running.
Sadly, there is a strong suspicion that fire was deliberately lit. It roared through the bush that makes this city such a delightful place to live and threatened the 330-kilovolt transmission lines that bring electricity into the city. We were only saved because transmission engineers managed to juggle the load by reducing distribution and they freely admit that luck played a major part.
While this fire did not burn down the transmission lines, the heat raised the air temperature around the wires, making it harder for them to transmit power. At the same time soot and ash settled on the lines, causing micro arcing and bringing the system close to closing down to prevent lasting damage. Once the system trips and shuts down, restarting is a delicate and lengthy process - and this fire persisted for several days.
It is said that trees are the " lungs of the city " and we guard them carefully, but there must be a degree of logic in the way they are balanced. The ground under high voltage transmission lines is kept completely bare as a fire precaution, but this fire made it obvious that this is insufficient. The forest on each side of that bare strip needs further thinning and it should have high priority for remedial burning to reduce the fuel load.
Last summer broke a lot of temperature records and it seems that the hot part of the year starts earlier and last many weeks longer. As a consequence, we face a longer bushfire season and we need to plan fire safety accordingly. What was sufficient in the past will not meet our needs in the future.
We need a comprehensive plan to manage the dense stands of bush that still separate suburbs. Our fire fighting services know where fire breaks will enable them to isolate fires and stop them roaring unchecked into suburban housing and they need legislation to make that happen. Such a plan will not be popular with some sections of the public, but we saw what can happen in both Hobart and Canberra several decades ago and fire danger has since increased.
Perhaps last weeks fire was a timely warning. Whether we believe in global warming or not, fire is delivering a greater danger each summer and we had better re-plan our defences. If we fail to do that, we will pay a price in lost homes - and lost lives !
Last week we had a major bushfire in Sydney's south-west and it seems that came perilously close to causing a major blackout city wide. That would have been a disaster. The trains would have stopped, isolating people and shutting down commerce. The lack of traffic lights would have created chaos on the roads and the entire hospital system would have had to depend on generators to keep life preserving equipment running.
Sadly, there is a strong suspicion that fire was deliberately lit. It roared through the bush that makes this city such a delightful place to live and threatened the 330-kilovolt transmission lines that bring electricity into the city. We were only saved because transmission engineers managed to juggle the load by reducing distribution and they freely admit that luck played a major part.
While this fire did not burn down the transmission lines, the heat raised the air temperature around the wires, making it harder for them to transmit power. At the same time soot and ash settled on the lines, causing micro arcing and bringing the system close to closing down to prevent lasting damage. Once the system trips and shuts down, restarting is a delicate and lengthy process - and this fire persisted for several days.
It is said that trees are the " lungs of the city " and we guard them carefully, but there must be a degree of logic in the way they are balanced. The ground under high voltage transmission lines is kept completely bare as a fire precaution, but this fire made it obvious that this is insufficient. The forest on each side of that bare strip needs further thinning and it should have high priority for remedial burning to reduce the fuel load.
Last summer broke a lot of temperature records and it seems that the hot part of the year starts earlier and last many weeks longer. As a consequence, we face a longer bushfire season and we need to plan fire safety accordingly. What was sufficient in the past will not meet our needs in the future.
We need a comprehensive plan to manage the dense stands of bush that still separate suburbs. Our fire fighting services know where fire breaks will enable them to isolate fires and stop them roaring unchecked into suburban housing and they need legislation to make that happen. Such a plan will not be popular with some sections of the public, but we saw what can happen in both Hobart and Canberra several decades ago and fire danger has since increased.
Perhaps last weeks fire was a timely warning. Whether we believe in global warming or not, fire is delivering a greater danger each summer and we had better re-plan our defences. If we fail to do that, we will pay a price in lost homes - and lost lives !
Thursday, 26 April 2018
Royalty !
There is something absurd in the process that determines who will one day sit on the throne of England and assume the title of King or Queen. That person must be a member of the " Royal " family and be foremost in the pecking order of line of birth. A baby boy born this week will take his place fifth in line for that honour.
All the citizens of the United Kingdom are expected to bow or curtsy to their monarch and yet a seat on the throne is something denied to them. The history books depict the tortuous family history of the monarchy as it was beset by civil war, invasion and religious conflict that saw kings beheaded and replaced by popular acclaim from overseas royalty. That line was broken many times in its journey to the present Monarch.
At the start of the twentieth century, most of the countries of Europe were headed by their own royal line but the numbers have dwindled. The few remaining have assumed a more collegial relationship with their subjects and abandoned the rigid formality of office. Even the reigning house of Windsor in Britain has shed some of the formality that was so evident just half a century ago.
Perhaps the biggest change is the dissolution of the old British empire. When the twentieth century dawned whoever sat on the throne of Britain formally ruled the countries marked in red on the world map. Today, most have moved to a public vote to select a president and maintain a friendly cohesion by inclusion in a Commonwealth of nations. Those nations are self governing and many accept the British legal system as the basis of justice in their courts.
It seems an anarchism that this must be a living person. In legal documents and in the phraseology of the courts the ruling factor is referred to as " the Crown " and it could be equally represented by the jewelled adornment worn by the Monarch at coronation. Such an object held in a display case in Canberra could serve that purpose equally well in Australia.
It seems inevitable that this country will eventually make the move to replace the British Crown with an Australian head of state. What form that will take will be controversial and it seems certain that it will be after the reign of the 92 year old Queen Elizabeth ends. There is a deep respect for the Queen in this country and the matter of a head of state will encounter political turbulence.
Protocol demands that Queen Elizabeth will be followed by Prince Charles and that may stir opposition. Charles is old and eccentric and many people would favour the more vivacious William and Kate, but that would require an abdication to become reality - and that seems unlikely.
Any far thinking bookmaker would probably give attractive odds that little Prince George will never be king of Australia !
All the citizens of the United Kingdom are expected to bow or curtsy to their monarch and yet a seat on the throne is something denied to them. The history books depict the tortuous family history of the monarchy as it was beset by civil war, invasion and religious conflict that saw kings beheaded and replaced by popular acclaim from overseas royalty. That line was broken many times in its journey to the present Monarch.
At the start of the twentieth century, most of the countries of Europe were headed by their own royal line but the numbers have dwindled. The few remaining have assumed a more collegial relationship with their subjects and abandoned the rigid formality of office. Even the reigning house of Windsor in Britain has shed some of the formality that was so evident just half a century ago.
Perhaps the biggest change is the dissolution of the old British empire. When the twentieth century dawned whoever sat on the throne of Britain formally ruled the countries marked in red on the world map. Today, most have moved to a public vote to select a president and maintain a friendly cohesion by inclusion in a Commonwealth of nations. Those nations are self governing and many accept the British legal system as the basis of justice in their courts.
It seems an anarchism that this must be a living person. In legal documents and in the phraseology of the courts the ruling factor is referred to as " the Crown " and it could be equally represented by the jewelled adornment worn by the Monarch at coronation. Such an object held in a display case in Canberra could serve that purpose equally well in Australia.
It seems inevitable that this country will eventually make the move to replace the British Crown with an Australian head of state. What form that will take will be controversial and it seems certain that it will be after the reign of the 92 year old Queen Elizabeth ends. There is a deep respect for the Queen in this country and the matter of a head of state will encounter political turbulence.
Protocol demands that Queen Elizabeth will be followed by Prince Charles and that may stir opposition. Charles is old and eccentric and many people would favour the more vivacious William and Kate, but that would require an abdication to become reality - and that seems unlikely.
Any far thinking bookmaker would probably give attractive odds that little Prince George will never be king of Australia !
Wednesday, 25 April 2018
Driving Licenses - and Age !
When is the right age to hand in your driving license - for your own safety and the safety of others ? There is no hard and fast rule here in New South Wales, but the RMS has the legal right to cancel a drivers license if they decide the holder no longer has the capacity to safely drive on the states roads. They can insist on a driving test to determine driving ability.
Older drivers in this state must obey graded license requirements. From age 80 they are required to have a doctor conduct a medical examination each year and certify their fitness to drive and from 85 they are required to have both this medical evaluation and be tested behind the wheel by a RMS driving evaluator.
The RMS may allows an aged driver to continue driving, but with restrictions. These may range from a ban on night driving to limitations relating to the drivers home and proximity to nearby shops. He or she may be banned from driving on high speed highways or from the heavy traffic of the inner city.
Age can certainly cause a drivers road skills to deteriorate and dementia is a growing hazard. Often it is family members who are growing concerned about their aged members driving lapses and in some states doctors have a mandatory duty to recommend license withdrawal if they consider holding a driving license poses a continuing danger. The medical profession generally dislikes that responsibility because it can be very disruptive to the close relationship between doctor and patient.
The number of aged drivers is increasing sharply as the car becomes an ever more important means of personal mobility. In March 2018 there were 167,721 drivers 80 years or over licensed to drive on NSW roads, and this was an increase on the 136,140 registered in 2013. Ten years ago the numbers represented only 98,280 drivers.
We often read of accidents where an older person mistook the accelerator for the brake. The ravages of diabetes can cause the loss of feeling in the legs and an otherwise mentally alert person may lack the physical capability to control a car. Sight and hearing deteriorate with age and every year the traffic volume increases measurably as the Australian population moves past twenty-four million.
This is not something to which a hard and fast rule can apply. Driving ability can deteriorate markedly from one year to the next despite that annual medical check being a very comprehensive evaluation - and which includes eye sight testing.
Perhaps certification for a shorter period may be helpful. Where a person qualifies to drive but physical deterioration is evident a six month license continuation would ensure a timely re-evaluation - and perhaps deliver a message to that driver that his or her driving days were coming to an end. It would tend to deliver that message more gently than an abrupt cancellation.
Older drivers in this state must obey graded license requirements. From age 80 they are required to have a doctor conduct a medical examination each year and certify their fitness to drive and from 85 they are required to have both this medical evaluation and be tested behind the wheel by a RMS driving evaluator.
The RMS may allows an aged driver to continue driving, but with restrictions. These may range from a ban on night driving to limitations relating to the drivers home and proximity to nearby shops. He or she may be banned from driving on high speed highways or from the heavy traffic of the inner city.
Age can certainly cause a drivers road skills to deteriorate and dementia is a growing hazard. Often it is family members who are growing concerned about their aged members driving lapses and in some states doctors have a mandatory duty to recommend license withdrawal if they consider holding a driving license poses a continuing danger. The medical profession generally dislikes that responsibility because it can be very disruptive to the close relationship between doctor and patient.
The number of aged drivers is increasing sharply as the car becomes an ever more important means of personal mobility. In March 2018 there were 167,721 drivers 80 years or over licensed to drive on NSW roads, and this was an increase on the 136,140 registered in 2013. Ten years ago the numbers represented only 98,280 drivers.
We often read of accidents where an older person mistook the accelerator for the brake. The ravages of diabetes can cause the loss of feeling in the legs and an otherwise mentally alert person may lack the physical capability to control a car. Sight and hearing deteriorate with age and every year the traffic volume increases measurably as the Australian population moves past twenty-four million.
This is not something to which a hard and fast rule can apply. Driving ability can deteriorate markedly from one year to the next despite that annual medical check being a very comprehensive evaluation - and which includes eye sight testing.
Perhaps certification for a shorter period may be helpful. Where a person qualifies to drive but physical deterioration is evident a six month license continuation would ensure a timely re-evaluation - and perhaps deliver a message to that driver that his or her driving days were coming to an end. It would tend to deliver that message more gently than an abrupt cancellation.
Tuesday, 24 April 2018
" Grenfell Towers " Long Shadow !
On June 14, 2017 we watched television footage of a London housing tower enveloped in fire as flames consumed its outer cladding, resulting in the death of seventy-one of its residents. We quickly learned that this became known as the Grenfell Tower tragedy and that many buildings spread across the world were clad in a similar dangerous product.
As we head nearer to the first anniversary of those deaths it seems remarkable that the city of Sydney has 412 buildings that have been identified as clad with this risky product and that 170 of those are residential buildings and 53 are described as high rise. The people living in those apartments go to bed each night aware that they risk burning to death in a similar manner to that London tragedy.
This week we had a law change to building regulations that covered flammable exterior cladding. Its presence on a building is now regarded as a " major defect ", giving the unit owner the right to demand rectification for up to six years after the building is completed. Of course, that supposes the builder is still in business and has the financial capacity to finance the work that needs to be done.
Removing the existing cladding from a building and fitting a replacement can cost an enormous amount of money and it now seems likely that this will be reflected in property prices. Owners selling are now offering property subject to a major defect and it is reported that in London one such owner had a $475,000 unit price devalued to just $ 50,000 because of that defect.
The banks and finance houses may also get skittish because it seems doubtful that the insurance industry will insure buildings with this hazard class and most forms of finance require insurance cover as part of the contract. In particular, buyers who made the purchase on an investment basis will be hardest hit.
Responsibility for rectification is still a legal enigma. Flammable exterior cladding does not meet the relevant building regulations and that encompasses architects, councils and the building company that constructed the building, plus the supplier who either made or imported the material used. That could be a nightmare if a contested case goes to court and some unfortunate judge has the job of pinpointing the bunny who has to foot the replacement bill.
Many councils are shivering in their shoes because the building regulations require councils to certify that all new buildings in their area meet the required regulations and to issue a certificate that they are fit for human habitation. Clearly, buildings with a flammable exterior do not meet that challenge.
It is unfortunate owners who bought their units in good faith who are bearing the brunt of this debacle. Not only are they living with an unacceptable fire risk but the very price stability of their greatest asset may crumble before their eyes. Eventually, the cost of rectification may rest on their shoulders.
This can not be left passing from hand to hand like the proverbial hot potato. Grenfell Tower proved that tragedy can happen and sooner or later luck will run out in another world city.
As we head nearer to the first anniversary of those deaths it seems remarkable that the city of Sydney has 412 buildings that have been identified as clad with this risky product and that 170 of those are residential buildings and 53 are described as high rise. The people living in those apartments go to bed each night aware that they risk burning to death in a similar manner to that London tragedy.
This week we had a law change to building regulations that covered flammable exterior cladding. Its presence on a building is now regarded as a " major defect ", giving the unit owner the right to demand rectification for up to six years after the building is completed. Of course, that supposes the builder is still in business and has the financial capacity to finance the work that needs to be done.
Removing the existing cladding from a building and fitting a replacement can cost an enormous amount of money and it now seems likely that this will be reflected in property prices. Owners selling are now offering property subject to a major defect and it is reported that in London one such owner had a $475,000 unit price devalued to just $ 50,000 because of that defect.
The banks and finance houses may also get skittish because it seems doubtful that the insurance industry will insure buildings with this hazard class and most forms of finance require insurance cover as part of the contract. In particular, buyers who made the purchase on an investment basis will be hardest hit.
Responsibility for rectification is still a legal enigma. Flammable exterior cladding does not meet the relevant building regulations and that encompasses architects, councils and the building company that constructed the building, plus the supplier who either made or imported the material used. That could be a nightmare if a contested case goes to court and some unfortunate judge has the job of pinpointing the bunny who has to foot the replacement bill.
Many councils are shivering in their shoes because the building regulations require councils to certify that all new buildings in their area meet the required regulations and to issue a certificate that they are fit for human habitation. Clearly, buildings with a flammable exterior do not meet that challenge.
It is unfortunate owners who bought their units in good faith who are bearing the brunt of this debacle. Not only are they living with an unacceptable fire risk but the very price stability of their greatest asset may crumble before their eyes. Eventually, the cost of rectification may rest on their shoulders.
This can not be left passing from hand to hand like the proverbial hot potato. Grenfell Tower proved that tragedy can happen and sooner or later luck will run out in another world city.
Monday, 23 April 2018
Britain's " Pearl Harbour " !
On October 14, 1939, just after the start of the second world war, Britain suffered a serious naval disaster that gave Germany a propaganda victory. In the fog of war it is hard to determine the precise details but a German U-Boat managed to penetrate Scapa Flo, the home base of the Royal Navy in the Orkney islands at the tip of Scotland, and sink a British battleship.
The Captain of U-Boat U-47 had a family connection that saw him holiday at Scapa Flo between the wars. Gunther Prien noted that the base was also the home of fishing trawlers and to avoid opening the defence boom constantly to allow them passage the navy had permitted a small opening between the sunken block ships that guarded the five entrances to Scapa Flo.
When war between Britain and Germany started Prien joined the navy and was given command of U-47. He suggested to Admiral Karl Doenitz that he thought a U-Boat could scrape through this narrow entrance and was given permission to make the attempt. It was a daring strategy and the only attempt at disguise was to paint out the big identification letters on the conning tower. Submarines of all nations looked remarkably similar.
U-47 approached in broad daylight, on the surface. Farmers in the field noticed the submarine but assumed it was British, and it was not challenged. Prien sailed openly up the waterway and then submerged and lay on the bottom, waiting for darkness. When he later approached the area which was the naval base he was utterly shocked to find it completely empty. He had expected to find battleships, cruisers and perhaps aircraft carriers but the warships had put to sea in the expectation of a German air attack on the base.
Searching this broad base of water he eventually came across an old battleship riding at anchor. This was HMS Royal Oak, a first world war battleship that had been originally coal fired and later converted to oil. It was twenty-five years old and long past its prime, being capable of only twenty-one knots it was incapable of keeping up with modern fleet actions. It was now something of a training ship and amongst its 1234 person crew were many juvenile boys leaning a sea trade.
U-47 fired four torpedoes at Royal Oak. Three missed and the fourth failed to explode, but crashed into the ships side and brought many on deck to investigate. Finding no visible cause, they returned to bed and Prien moved U-47 closer and fired two more torpedoes from his stern tubes.
This later attack was brilliantly successful. The explosions tore gaping holes and started a fuel fire ,and within minutes the battleship rolled on her side and sunk, killing 833 of her crew. U-47 quickly withdrew to her entry point and successfully returned to Germany. Prien and his crew received a heros welcome. They were feted in Berlin and awarded the highest decorations. The attack was regarded as an epic victory and fully publicised by the Nazi propaganda industry.
But for sheer good luck the Royal navy might have suffered a defeat similar to the Japanese attack on Pearl Harbour. An enemy submarine in a crowded harbour might have sunk enough warships to cripple the Home Fleet and altered the balance of the naval war. Scapa Flo received an urgent update of its defence facilities and later in the war Gunther Prien and his crew were attacking at Atlantic convoy when depth charges sent U-47 to a watery grave.
The Captain of U-Boat U-47 had a family connection that saw him holiday at Scapa Flo between the wars. Gunther Prien noted that the base was also the home of fishing trawlers and to avoid opening the defence boom constantly to allow them passage the navy had permitted a small opening between the sunken block ships that guarded the five entrances to Scapa Flo.
When war between Britain and Germany started Prien joined the navy and was given command of U-47. He suggested to Admiral Karl Doenitz that he thought a U-Boat could scrape through this narrow entrance and was given permission to make the attempt. It was a daring strategy and the only attempt at disguise was to paint out the big identification letters on the conning tower. Submarines of all nations looked remarkably similar.
U-47 approached in broad daylight, on the surface. Farmers in the field noticed the submarine but assumed it was British, and it was not challenged. Prien sailed openly up the waterway and then submerged and lay on the bottom, waiting for darkness. When he later approached the area which was the naval base he was utterly shocked to find it completely empty. He had expected to find battleships, cruisers and perhaps aircraft carriers but the warships had put to sea in the expectation of a German air attack on the base.
Searching this broad base of water he eventually came across an old battleship riding at anchor. This was HMS Royal Oak, a first world war battleship that had been originally coal fired and later converted to oil. It was twenty-five years old and long past its prime, being capable of only twenty-one knots it was incapable of keeping up with modern fleet actions. It was now something of a training ship and amongst its 1234 person crew were many juvenile boys leaning a sea trade.
U-47 fired four torpedoes at Royal Oak. Three missed and the fourth failed to explode, but crashed into the ships side and brought many on deck to investigate. Finding no visible cause, they returned to bed and Prien moved U-47 closer and fired two more torpedoes from his stern tubes.
This later attack was brilliantly successful. The explosions tore gaping holes and started a fuel fire ,and within minutes the battleship rolled on her side and sunk, killing 833 of her crew. U-47 quickly withdrew to her entry point and successfully returned to Germany. Prien and his crew received a heros welcome. They were feted in Berlin and awarded the highest decorations. The attack was regarded as an epic victory and fully publicised by the Nazi propaganda industry.
But for sheer good luck the Royal navy might have suffered a defeat similar to the Japanese attack on Pearl Harbour. An enemy submarine in a crowded harbour might have sunk enough warships to cripple the Home Fleet and altered the balance of the naval war. Scapa Flo received an urgent update of its defence facilities and later in the war Gunther Prien and his crew were attacking at Atlantic convoy when depth charges sent U-47 to a watery grave.
Sunday, 22 April 2018
A Sick Joke !
This banking Royal Commission has revealed blatant crime by the very banking industry that is the cornerstone of our financial system. When a bank steals money from our wallets, is that any different from a bandit who sticks a gun in our ribs and robs us in a street holdup ? The difference is that this guy with a gun usually gets caught and is sent to prison for a few years. It seems unlikely that anyone in the banking fraternity is looking at a prison stretch as a result of these disclosures.
There is talk that heads may roll at both board level and in the corner suites of banking institutions, but that means the bandits walk away with their superannuation cheques and may even get a gratuity bonus to speed them on their way. These were crimes that occurred under their control. What happened to the notion of management responsibility ?
These crimes were calculated - and deliberate ! The litany seems endless. Customers were billed for services they never received and in many cases the deceased had spurious charges added to their accounts years after their death. Financial advice was in many cases simply disastrous. People lost both their homes and businesses and yet these corrupt advisers remained spreading their evil message year after year. Every opportunity to hike fees and charges to inflate the bottom line was taken and the banks moved in lockstep to gouge under the guise of respectability.
What we are hearing is draconian penalties for any future malfeasance. There are threats to impose billions in fines if any of this ever occurs again, but it looks like that those who headed the various levels where this banditry originated will survive. It seems like that " too big to fail " principle is being invoked. The people who cooked up these nefarious schemes are too important to banking to be sacked and so they must get a slap on the wrist - and be reformed. They will not be made to pay for their crimes.
This Royal Commission has also shone the light on those regulatory bodies tasked with supervising the banking industry and preventing just this sort of shenanigans. What we are seeing in our banking industry is similar to the corruption in the world banking industry that resulted in the 2008 world recession. The banks began bundling home mortgages into what they called " derivatives " and selling them as investment opportunities, aided by the credit checking agencies which bestowed them with triple A credit ratings. We are still fighting off the effects of that disaster.
Those regulatory agencies failed - and they must pay a price. In 2008 neither the credit agencies nor the banks suffered the consequences of their actions. In fact they were bailed out with public money, and what we are seeing in this Royal Commission is one of the results of the lack of public accounting for that integrity loss. The banks lost their fear of the regulatory agencies, which lost the will to do their jobs properly.
About time for a clean out of both parties. We will not have honest banking until the decision makers fear the regulators - and know the consequences of an integrity breach will bring personal dismissal.
There is talk that heads may roll at both board level and in the corner suites of banking institutions, but that means the bandits walk away with their superannuation cheques and may even get a gratuity bonus to speed them on their way. These were crimes that occurred under their control. What happened to the notion of management responsibility ?
These crimes were calculated - and deliberate ! The litany seems endless. Customers were billed for services they never received and in many cases the deceased had spurious charges added to their accounts years after their death. Financial advice was in many cases simply disastrous. People lost both their homes and businesses and yet these corrupt advisers remained spreading their evil message year after year. Every opportunity to hike fees and charges to inflate the bottom line was taken and the banks moved in lockstep to gouge under the guise of respectability.
What we are hearing is draconian penalties for any future malfeasance. There are threats to impose billions in fines if any of this ever occurs again, but it looks like that those who headed the various levels where this banditry originated will survive. It seems like that " too big to fail " principle is being invoked. The people who cooked up these nefarious schemes are too important to banking to be sacked and so they must get a slap on the wrist - and be reformed. They will not be made to pay for their crimes.
This Royal Commission has also shone the light on those regulatory bodies tasked with supervising the banking industry and preventing just this sort of shenanigans. What we are seeing in our banking industry is similar to the corruption in the world banking industry that resulted in the 2008 world recession. The banks began bundling home mortgages into what they called " derivatives " and selling them as investment opportunities, aided by the credit checking agencies which bestowed them with triple A credit ratings. We are still fighting off the effects of that disaster.
Those regulatory agencies failed - and they must pay a price. In 2008 neither the credit agencies nor the banks suffered the consequences of their actions. In fact they were bailed out with public money, and what we are seeing in this Royal Commission is one of the results of the lack of public accounting for that integrity loss. The banks lost their fear of the regulatory agencies, which lost the will to do their jobs properly.
About time for a clean out of both parties. We will not have honest banking until the decision makers fear the regulators - and know the consequences of an integrity breach will bring personal dismissal.
Subscribe to:
Posts (Atom)