Son of Wallis takes shape

Advertisement
url

From Banking Day:

Suncorp Metway was “very close” to a bank run at the height of the financial crisis, in 2008, the bank’s former managing director, John Mulcahy, told the Sunday Mail.

…The Sunday Mail reported on an October 2008 briefing from the Reserve Bank of Australia and the Australian Prudential Regulation Authority, obtained under Freedom of Information laws, which said that before the guarantee some regional and smaller institutions were seeing “outflows to the major banks”.

Yes, we had a financial crisis that needs a full going over in the forthcoming “Son of Wallis” inquiry. The Australian is reporting a series of rumours on that front:

Advertisement

It is understood that draft terms of reference for the “root and branch” review could be released next month, and consultation with the major banks is already under way.

The final scope of the inquiry will be determined early next year after a feedback period of about three months.

As for the leadership of the review, former CBA chief executive and ex-Future Fund chairman David Murray — a neighbour of federal Treasurer Joe Hockey in Sydney’s upmarket Hunters Hill — is thought to be the leading candidate if the government wants an experienced industry insider.

Heading the list of “outside” candidates, if perceptions of independence are seen to be important, are Telstra chairwoman Catherine Livingstone, Business Council of Australia president Tony Shepherd and QBE Insurance chair Belinda Hutchinson.

As for panel members, the odds for Mike Callaghan, former deputy secretary of Treasury and chief of staff to Peter Costello, are shortening. This is provided that Mr Callaghan, G20 director at the Lowy Institute, is not tapped to succeed Treasury secretary Martin Parkinson next year.

Competition, the role of regulators and stabilising funding should all be central to the inquiry, according to the article. I agree. But the list of rumoured candidates to run the show is all wrong. There are plenty of banking specialists with nothing to hide nor legacies to protect. And it should definitely be someone from outside the plutocracy boys club.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.