A Bunch of Thieves !

The fact that just four major banks totally dominate the Australian banking industry is a cause for concern by many people.   Their power is enormous and they operate in lockstep when setting the terms of trade that result in them accruing ever increasing annual profits.  There are constant calls for these " money factories " to be examined by a Royal Commission.

So far that has been denied and we are assured that the conduct of our banking industry is safely monitored by the regulator - which  in this country is the Australian Securities and Investment Commission. ( ASIC ).

A case in the process of being settled casts doubts about whether the " public interest " is being served, or if ASIC is merely ensuring that the needs of the Australian Treasury take prominence.
ASIC has accused three of our four banks of rigging what is called the " swap rate " - the key rate of interest banks charge each other for exchanging money to settle business loans, and of course this has a direct influence on the rate charged to bank customers negotiating loans.

It is reported that ASIC and ANZ Bank are close to agreeing on a $50 million fine as settlement and that this will influence the outcome expected on both Westpac and National Australia bank who have this same transgression settlement pending.   What is angering the purists looking for a fair outcome is the failure of this settlement to include pressure for the bank to admit wrongdoing.   Such an admission would open the way for a class action by bank customers to reclaim excess interest charged.

This certainly does not appear to be a fair outcome.   The banks connived together to " fix " the swap rate in their favour and as a result the average bank customer was disadvantaged.   When ASIC swooped on this irregularity and deemed it illegal a carefully drafted settlement seems to protect the banks from class actions that could cost them an enormous amount of money.   Instead, they will each escape with a mere fifty million paid into the Federal Treasury.

That fifty million is just " loose change " to the banks that record their annual profits in billions. It certainly has little incentive for the bank bosses to change their ways and it is unlikely to affect the bonuses the banks awards for accruing those billions.  The most likely outcome is mild annoyance that they were clumsy enough to get caught and assurance that they will avoid detection in the future.

When a class action shaves a significant portion off the bottom line and causes a drop in the annual dividend paid that certainly gets the attention of shareholders - and they hold the people who run their bank responsible.  Job losses send a clear message to the lower ranks - and ethics need to be part of the culture at the highest level.

This ASIC result fails to deliver that message !