The ABA has shot down criticism of the banks saying the rise of populism post-GFC and the tendency for consumers to buy into media headlines as well as the bank-bashing attitude of politicians are to blame for “persistent myths” about the sector.
In a speech at the National Press Club this week, ABA chief executive Anna Bligh said that while Australian banks had survived the GFC financially they have “not avoided the global reputational fallout from that crisis and the populist banking politics it brought with it”.
“As more and more people form the view that mainstream institutions have failed to protect them from the impacts of globalisation and technological change, the more distrustful they have become. The more they have sought the comfort and simplicity of populist ideas and movements,” Ms Bligh said.
“Here in Australia, this has been compounded by a number of serious instances of poor bank culture and poor customer outcomes that have hit the headlines and resonated with a sceptical public, regardless of their own personal experience with their own bank.”
Ms Bligh said that contrary to common belief, customers have a relatively positive view of their own banks. A recent survey found that 53 per cent of consumer participants reported they trust their own bank, while only 31 per cent trust the banking industry, she added.
Meanwhile, Ms Bligh said the behaviour of politicians who are “climbing over each other” to seem to be tough on banks is “dangerous for Australia’s financial stability”.
“In this political landscape, it is not surprising that persistent myths and criticisms about banks flourish,” she said.
Contrary to claims from politicians that banks are out to rip-off Australians, Ms Bligh said 80 per cent of bank profits are returned to shareholders.
Ms Bligh added that “Australia’s banks are Australia’s largest taxpayers – the industry paid more than $14 billion in tax last year alone”.
Banks also get a bad rap compared with non-banks, Ms Bligh said.
“Such is the venomous attention that banks now attract in the public arena that unregulated, unsupervised non-bank lenders, and other payday lenders, have flourished with almost no scrutiny or public acrimony,” she said.
“Yes, there is more to do and, in my view, more to do at a faster pace than banks are used to, but the leadership of our banks are intensely focused on the challenge.”
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 20 Jul 2018CPA shuts financial advice divisionBy Reporter
- 20 Jul 2018Don't neglect AI, advisers warnedBy Tim Stewart
- 19 Jul 2018AMP unveils new in-house training programBy Reporter
- 19 Jul 2018Self-licensed adviser cops 4-year ASIC banBy Reporter
- 19 Jul 2018Hub24 to launch new core offeringBy Reporter
- 19 Jul 2018SMSF sector warns about advice ‘exodus’By Miranda Brownlee
- view all