The Hayne royal commission has released its interim report today after it was tabled with the Governor-General earlier this afternoon.
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.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
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