The interim report covers the policy related issues that emerged from the first four rounds of hearings – consumer lending, financial advice, SME loans and the experiences of regional and remote communities with financial services entities.
Treasurer Josh Frydenberg held a press conference where he said the industry was one of the largest in Australia and impacted on all Australians
“What is clear is that the culture, the conduct and the compliance of the sector is well below the standard the Australian people expect and deserve,” he said
Mr Frydenberg said the royal commission was to report on misconduct and conduct that falls short of community standards and identify causes of that conduct.
“The interim report delivered today shines a very bright light on the poor behaviour of our financial sector. Banks and other financial institutions have put profits before people,” he said.
Mr Frydenberg said that greed and monetary benefits had been behind many of the actions of the bank.
“Greed has been the motive as short-term profits have been persued at the expense of basic standards of honesty. The culture and the conduct of the banks were in the words of the commissioner ‘driven by and reflected in their remuneration practices and policies’,” he said.
In the interim report, commissioner Kenneth Hayne said that greed dictated many of actions that were found to fall below legal and community standards.
“The answer seems to be greed – the pursuit of short-term profit at the expense of basic standards of honesty,” said Mr Hayne.
Mr Hayne said that it was clear that entities often appeared in charge of their own punishments.
“Too often entities had been treated in ways that would allow them to think that they, not ASIC, not the Parliament, not the courts would decide when and how the law would be obeyed or the consequences of the breach remedied,” Mr Hayne said.
Mr Hayne also posed the question on how to fix the conduct presented by the banks.
“Much more often than not the conduct now condemned was contrary to the law. This does raise the question if new laws are required or if existing laws need to be better enforced. Should the existing law be simplified rather than adding an extra layer of legal complexity to an already complex regulatory regime?” asked Mr Hayne.
As of the beginning of the week, the commission had received 9,388 submissions with the top three industries in the submissions being the banking industry (62 per cent), superannuation industry (12 per cent) and the financial advice industry (9 per cent).
The public is invited to respond to commissioner Hayne’s interim report and the due date for submissions is 26 October 2018.
The final date for members of the public to make online submissions to the commission about past conduct is 5pm today.
After today the commission is expected to “shift its attention from past experiences to proposals on what should be done in response to the issues raised or conduct uncovered within the banking, superannuation and financial services industry”.
The seventh round of hearings will focus on policy questions from the first six rounds, starting in Sydney on 19 November before moving to Melbourne from 25 November.
The final report from the commission is due 1 February and will include the topics of the fifth, sixth and seventh round of hearings, which focus on superannuation, insurance and policy questions arising from the first six rounds, respectively.
Can’t wait till 12 October for the start of the Directions hearing against McMaster and Dover. Is it going to be the fainting trick or mental health issues
A hasty “knee jerk” response to this report will most likely do more harm than good.
With all of these grand gestures of improvements for consumers, more often than not it just leads to more red tape, slower processes and increased costs to the consumer.
Lawyers go to ASIC to cut their teeth in finance law and then take those skills and experience to the big banks who pay the big dollars. These lawyers are never going to attack the big banks as this is where their future paychecks will be coming from.
ASIC are never held accountable for their failures so they have nothing to lose. As a token gesture they occasionally attack smaller licensees such as Dover and the odd dodgy planner but for all their bluster they are basically flaccid. ASIC offer up these occasional small fish to the media as a symbol of their scrutiny over the industry however they fail miserably to enforce any meaningful compliance over the biggest offenders. And, when ASIC are asked why they are so ineffective they spew the same old nonsense about lack of powers and poor funding. At the end of the day the elephant in the room is the cosy relationship between ASIC and the big banks and, until this is addressed the clients of the big players will continue to bear the brunt of these failings.
The RC have suggested criminal activity by a number of the larger banks and AMP. ASIC’s response has been to publish that they are pursuing a civil case against closed licensee for a dodgy client protection policy.
ADMITTING AND ACKNOWLEDGING GREED IS ONE THING – WE ALL KNOW THAT – BUT UNLESS THEY DO SOMETHING AND RECOMPENSATE THE SUFFERING VICTIMS SUCH AS TONY AND DOROTHY RIGG, THE WHOLE “ROYAL COMMISSION” WILL BECOME KNOWN AS WHAT WE SUSPECT IT HAS BEEN – ONE BLOODY BIG SHAM/SCAM, PRETENDING TO THE PEOPLE THAT THEY CARE!.
Shhhh, too loud Brian
Also google BANKVICTIMS.COM.AU BANKREFORMNOW.COM.AU for more bank victims.
Agreed we should work for free. You talk about commissions, the commissions is an arrangement between the product provider and the advisor for the introduction. If the clients don’t like it move and find something better suitable. Hayne you have done this for free I suppose? This is not costing the taxpayers right? And please the legal professionals has quickly changed paths and working in the best interest of their clients…how much fees are the legal fees in doing a class action? Very interesting world we live in. I have only and only done the best for my clients and don’t come and tell me what red tape to add to our advice offering next. SO ANGRY
Hayne says Dover did not do anything….
Hayne also says ASIC and APRA did not do anything. For years and years. Just sat there watching while the banks did whatever they want. And did they want.
Heads will roll at ASIC and APRA. Peter Kell is just the first public execution. ASIC broken up into separate divisions, each with a fresh start team of new executives. That really means its all over red rover for those on the inert and conflicted mahogany row.
It makes the French Revolution and Madame Guillotine look like a practice run.
And it makes ASIC’s court case against Dover look a feeble hope….
I believe the laws are already in place but the authorities have turned a blind eye, WHY ? Why do we employ these incompetent people ? Google Tony Rigg vs Commonwealth Bank and make up your own mind, it is now 33 years of hell for us and we like many others were never in default, the CBA staff engineered us into a position to make it appewar that we were in default but never were.
Default? Confusing . . . Do you mean ‘at fault’ – please explain Pauline . . .
thank god for your humorous:D post i needed it.
career: gonski
business value : plummeting
exit strategy : none
just let me laugh for god sake
It’s great that Hayne is asking whether existing laws should be simplified and better enforced. I think this is absolutely the best approach to take. It has become quite clear that more and more disclosure and compliance bureaucracy just forces up cost and complexity for consumers, without making them any better off. It’s time to get back to basics.
absolutely. he has summed it up nicely:
Obey the law.
Do not mislead or deceive.
Be fair.
Provide services that are fit for purpose.
Deliver services with reasonable care and skill.
when acting for another, act in the best interests of that other.
I can do 5 out of the 5 but I can’t make profit from the last one though??
ASIC put a quite capable Dealer Group in Dover out of business for a minor breach yet only fines the Banks and AMP for far more. Shouldn’t they also lose their licences ?
good question. Elise Morgan asked that question to James Shipton. his answer, “well it’s not that easy”
my answer: well, that’s not good enough.
http://www.abc.net.au/news/programs/the-business/2018-09-25/asic-says-bankers-could-face-jailtime/10304554
“Mr Frydenberg said that greed and monetary benefits had been behind many of the actions of the bank.” – then let’s see him and his political colleagues give up their parliamentary pensions. And Hayne can give up his judge’s pension as well. After all, they are ‘fees for no service’ as well.
Politicians entering parliament after a particular date don’t get the rolled gold pensions. As for Hayne he very much is providing a valuable service. Let’s not overstate things.
Is there a link to the report?
Does greed and monetary benefits drive the legal profession to encourage and facilitate class action cases or are they enthusiastically pursued because of a pure sense of justice for those who can’t represent themselves ?
Ha Ha, you kid right, nah you kidder. Justice for whom ? ha ha. the class actions are for the lawyers benefit.