It seems that you can't go a single week in this world without reading about another big bank scandal. Whether the focus is on their sheer greed, or the ongoing bank bill swap rate saga, it's easy to see why the Big Four are a constant source of Australia's ire. With such terrible conduct and poor behaviour ever-swirling around the major banks, you'd be forgiven for thinking that heads must be rolling left, right and centre – after all, that would surely be the case in any other industry.
Well, you'd be wrong. Not one of the Big Four has given a single senior executive his or her marching orders, a parliamentary committee has found – and now the Australian government wants to know why.
An October enquiry lambasted senior executives for forging a 'poor compliance culture', built up over a number of years. Additionally, it was figured that the big banks did not protect the closest interest of their customers on several occasions, states a report published by the Standing Committee on Economics. In summary, it was noted that because it was the senior executives who built and then encouraged this culture, it is them who should be held accountable.
Why are Australians angry at the Big Four?
The committee suggested that the high-up bigwigs who made significant breaches shouldn't only face the sack, but should be named and shamed, too.
That's a question that could take up several articles – in fact, our blog features quite a few of them – but it largely circles around their record profits (and money-grabbing ways), the fact that they delay passing on interest rate cuts and, well, pretty much all the scandals they create for themselves. The committee suggested that the high-up bigwigs who made significant breaches shouldn't only face the sack, but should be named and shamed, too. So, is it ever likely to happen?
Not under the current government, if members of the opposition are to be believed. Labor MPs think that the enquiry was set up so that the government would swerve a royal commission into Australia's banking industry (which would likely make them look very bad indeed). Adam Bandt, a Green MP, made his own report into banking practices – and it was equally damning on both sides. Mr Bandt wrote that Australia's major banks have a 'cosy and privileged position' in Aussie society, making monstrous profits that most other businesses could never hope to achieve – all off the back of their customers.
"We need a royal commission to take a long hard look at Australia's banks financial sector and make recommendations about proper reform," said Finance Sector Union national secretary Julia Angrisano. That establishment also equated the report as similar to 'calling bank bosses to Canberra for a friendly cup of tea and a chat'.
What happens now?
Should the government head the official report, a new tribunal will be created, with all complaints melded into one big one. Even so, Gerald Brody, the head of the Consumer Action Law Centre, said that even though there is great need for a further enquiry of sorts, he isn't quite sure how it should be approached.
"We're not convinced a new tribunal will meet those benchmarks around accessibility and providing fair outcomes," said Mr Brody.
CAPE has long been a champion of banking reforms. We doubt that the Big Four will change – they never have. As a customer-owned bank, every cent we make is filtered back down to our members, in the form of better loan rates and other benefits. Don't hesitate to get in touch with us to find out more.