There have been many calls for a Royal Commission into the conduct of the big four Australian banks but instead a tamed down Parliamentary enquiry has been looking into the excesses that have shocked the public in recent years. The power of these four great banking institutions is enormous - and so is the profit they declare every year at the end of the reporting season.
The scandals that keep breaking like tsunami's on the wealth of ordinary Australians seem like the expectations of Mafia crime. Thousands of people who went to their bank for investment advice on providing for their retirement were duped into buying assets that delivered a poor return, but enriched both the bank and the person giving advice because of commissions paid.
We are now hearing of bank customers being billed for financial advice that they never asked for - nor received. The interest charged on credit cards was both excessive and surrounded with wealth traps like fifty dollar fines for being just a day late in making monthly repayments. The banks became expert at milking their entire operations with " fees " to extract wealth from customer accounts.
World banking came into disrepute in 2008 when the " Derivitives " scandal broke and caused a world recession. Home mortgages were sliced and diced into supposed triple A rated securities which were sold to unsuspecting commercial investors. These were mortgages based on a price bubble and in many cases were issued to buyers who lacked the solvency to repay their loans. It cost governments billions to bail out that mess - and not a single banker served even a days prison time for that debacle.
This Australian parliamentary enquiry is examining a proposal that is striking fear into the heart of banking executives. It is suggested that the people responsible for these debacles be named and shamed. It has actually been nominated by the head of one of the banks, and bitterly opposed by the others.
As things stand, when one of these scams is exposed the banks pleas mea culpa and institute a programme of compensating the aggrieved, but usually this falls far short of the overall profit made, and the lower rated people who probably faced the customer across a desk are dismissed. The senior executives - on whose watch these transgressions occurred - continue to draw their fat salaries and enjoy the privileges of office.
This proposal delivers responsibility to where it is due. A senior banker named and shamed has no further place in the banking industry. His present employer is duty bond to show him the door, and he in anathema for employment anywhere else in the industry. It is a huge incentive to be scrupulously correct in ensuring that the process under his or her control complies with legal - and moral - conduct.
That is a responsibility that has ben missing in the industry standards that apply to senior banking executives. The aspects of banking that come under government control fall within the enquiries of the Australian Securities and Investment Commission ( ASIC ) which usually takes years and is hesitant in naming offenders.
Holding those who have the power of decision and making their jobs depend on the outcome of those decisions should be an absolute no brainer !
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