Sheer Arrogance !

Despite the findings of the Royal Commission into the Australian banking industry revealing clear evidence of customers billed for services that were not provided and even continuing to impose fees on the accounts after the death of their customer, the banks are claiming that not everything had to be in the best interests of their members.

They are now denying that a range of legal breaches that had violated the Corporations Act was potentially a criminal violation .  It denied that charging advice fees to dead people amounted to a potentially criminal breach of the Superannuation Act.

With that attitude to what has been clearly revealed to the public gaze the expectation that the banks will improve their accountability and turn a new leaf is very doubtful.  Their priority seems to be concentrated on serving the best interests of their shareholders at the expense of whatever integrity they owe their customers.

It may be relevant to remember the history of banking in Australia. In 1947 then prime minister Ben Chifley announced that he intended to nationalize all the Australian banks and the nation would be served by a single bank, the government owned Commonwealth Bank of Australia.   This was seen as a plank in the Labor party's socialist agenda and was roundly condemned by the business world.   The degree of control it would place in the hands of the national Treasurer was overwhelming.

The force of opposition eventually made bank nationalization an election issue and Labor lost office in a landslide.  Not long after that, we began to see mergers and takeovers.  The number of banks began to dwindle, until banking in Australia emerged as the present quartet which clearly march in lockstep.

In those lost days of competitive banking the fact that the Commonwealth bank was government owned made it the standard bearer.  This mix of private and government banking gave us the best of both worlds, until the government decided it had no business in banking and sold the Commonwealth Bank. The problems encountered in this Royal Commission clearly originate from that change.

The government needs to consider breaking up these four pillars and forcing them to diversify or of embedding the supervisory agencies within the banks so that all aspects of marketing are under the direct surveillance of those tasked with implementing the rules.   It is essential that breaches are not simply policed by a monetary fine, but that criminal penalties committed by both the bank and the supervising authority will result in imprisonment.  That area of responsibility reaches as high as the board of directors.  It needs to be clear that those at the top of the pyramid bear responsibility for the actions of those working under their control.

The findings of this banking Royal Commission have been horrific.  Greed for profit has been endemic and the nation has been plundered mercilessly.  Many who looked to the banks to manage their retirement have seen their savings squandered and the ball is clearly in the government's court to institute the changes to bring integrity back to banking.

Promises of piety will not ensure that happens.  Now is the time for those hard decisions that make banking subjected to the oversight that has been lacking.  The government itself will be judged on that outcome !