Bank pantomime reaches operatic proportions

When the Turnbull Government decided for political reasons to reject Labor’s pledge for a no-brainer Royal Commission into banks – owing to a staggering string of scandals in BBSW, insurance and financial planning – it wedged itself by having to return funding to ASIC that it had itself cut just two years earlier, as well as extending the tenure of the same ASIC boss that had failed to prevent any of the problems in the first place.

To spin these policy blunders as a positive it embraced a user-pays model for ASIC, which meant that it could claim that there was no cost to tax-payers – which its own former chief economist has declared quite rightly will only increase the bank’s capture of the failing regulator.

At the same time, to make it appear like they’re doing something in response to the Government, banks have now issued all sorts of “code of conduct” claptrap. Yet, the truth is, the banks are not now fighting the Turnbull Government. They are, in fact, running scared from Labor’s Royal Commission, and are for all intents and purposes now in bed with the Government.

But we can’t have that look with an election in two months can we?

Which brings us to the marvelous pantomime of the past 24 hours in which the banks were operatically hauled before a faux-enraged prime minister (who until last week never mentioned bank scandals), from The Australian:

Prime Minister Malcolm Turnbull called an early-morning meeting with the nation’s bank bosses yesterday to put the industry on notice that it needed to clean up its act.

“I reminded them that the banks are based on trust and that they are businesses unlike any other,” Mr Turnbull said. “They needed to recognise that … the customer had to be at the heart of everything and they had to go further than simply talking about that,” Mr Turnbull said.

The ABA, which represents 25 banks including the major lenders, has appointed Gilbert + Tobin partner Gina Cass-Gottlieb to lead the initial work, including appointing an independent expert to oversee implementation.

It will include an independent review of product sales commissions, payments and targets. Protections for whistleblowers would be standardised, a register of rogue financial advisers would be extended to all bank employees, and complaints-handling and dispute-resolution improved. While the big banks noted many of the actions were already under way, the review of remuneration for frontline bank staff selling everything from mortgages to business loans would build on reforms that banned commissions for financial advisers and recent efforts to wind back life insurance commissions.

And now today the banks are extravagantly ‘muscling up’ in response, from the AFR:

Major banks have hit back at a week of criticism from politicians, revealing their own review of industry pay structures.

The country’s biggest financial institution’s chief told MPs to focus on creating jobs rather than debating inquiries.

The banks announced a review of commissions paid to sales staff and promised to improve protection for whistleblowers after Prime Minister Malcolm Turnbull called leaders of the big four to a meeting in Sydney where he told them banks had a special responsibility to the community.

But shortly later, Commonwealth Bank of Australia chief executive Ian Narev underlined an increasingly testy relationship between banks and Canberra by declaring the biggest issue in the country was creating jobs and tax reform, rather than pursuing banks over customer complaints – some of which were unwarranted.

What a pile of baloney. This is pure theater by a political party and prime minister that has again been caught with his pants down by the Opposition’s simple embrace of good policy: the banks have behaved badly across a whole range of businesses and we need to know why: why the regulator let them, how it can be stopped, what it will cost, and how to adjust the structure of the system to prevent more of the same. If there was ever a righteous cause for an Inquiry – Royal Commission or other formal legal process – then this it.

Instead we have all sorts of Coalition and bank hand-waving that is nothing more than a diversionary tactic to cover a political alliance against correct policy process.

The Turnbank Alliance has no clear direction nor purpose, no accountability, no policy co-ordination for the good of Australians, a complete confusion of responsibilities, rampant conflicts of interest, no research nor scoping of the problem, no justice, and it inherently hands banks more power to abuse the system as they morph into their own policeman.

In a string of shockingly bad Turnbull policy failures this is now numero uno.

UuuuuuuoooooooooH!

Comments

  1. Customers have treated Commbank and Narev badly! When will the persecution of Banksters END!
    NAUGHTY customers! Time for a Royal Commission into customers. In Panama!

  2. Tassie TomMEMBER

    6 months ago Turnbull had my vote. Now I’m torn, but I’m leaning toward Labor on the single issue of the Royal Commission into banking. Even if the rest of the country falls apart aided by leadership paralysis (which we’ve really had constantly since about 2009), the Royal Commission will provide me with great entertainment for the next 3 years.

    Since the insurance arms of the banks are under the spotlight I hope the terms of reference get widened to all insurers including the private health insurers. That would be truly awesome.

    • GunnamattaMEMBER

      I would never have voted Torynuff in a pink fit, but I wouldnt have voted ALParatchik either.

      At the moment the proposals on

      Royal Commission into banks
      Removal of Negative Gearing for existing dwellings
      Limits on Superannuation concessions

      have me leaning towards the idea that for the first time in a generation I may actually vote ALParatchik (……though I am just waiting to see what their policy on the immigration spigots will be, and to see if they will come out with anything affecting the ATO data match on foreign buyers of Australian real estate – I suspect they will run immigration hard to ensure that RE prices dont fall)

      • Tassie TomMEMBER

        “I would never have voted Torynuff in a pink fit, but I wouldnt have voted ALParatchik either.”

        Unfortunately, unless you live in the seat of Melbourne, Kennedy, Fairfax, Indi, Denison or maybe a couple of others, it doesn’t matter who you put a “1” against in the lower house – all that matters is whether you give Labor or LNP the lower number.

      • @Tassie

        Here’s the problem, Australian voters consistently does not put the correct party on the lowest number. Hence why we have this corrupt rent seeking neo-liberal society.

    • +1 PMT had my vote because I believed (incorrectly) that he would substantively reform tax. I thought GST would lift to 12.5% but then he would ring fence NG, wind back CGT discounts for individuals and trusts; move to marginal super rates … all the things we had been talking about on MB. Instead, nothing, nada, zilch. Labor or the Greens for me now.

  3. GunnamattaMEMBER

    Utterly surreal that the only place I can get any substantial idea of the comments I heard on ABC (radio) news last night made by Ian Narev at the Israel Australia Chamber of Commerce (in case anyone else can find them) is in the Melbourne Rupert.

    Commonwealth Bank chief Ian Narev attacks probe plan

    http://www.heraldsun.com.au/business/cba-chief-attacks-probe-plan/news-story/b997fcb26e7952ad904b38df90e32c25

    A Royal commission into banks would damage the economy, undermine confidence in the nation and potentially hit living standards, the chief of Australia’s biggest bank says.

    Commonwealth Bank chief Ian Narev says good policy must be at the centre of the coming federal election debate, not “slogans and sound bites”.

    In the strongest response yet from a major bank to the federal opposition’s push for a commission, Mr Narev says it would be “bad policy”.

    “It’s not the right policy for an industry with this record, with this approach and with this regulation,” he said, speaking on Thursday at a business lunch in Melbourne.

    “The fact the industry … is acknowledging and fixing ­mistakes and also that we have such strong regulators makes the analogy with other circumstances in which royal ­commissions have been ­recommended as baseless.”

    His comments came as the major banks announced a joint campaign to tackle the fallout from the scandals that have engulfed the sector in recent years.

    and to back that up

    “We don’t think the royal commission is a good idea ­because it will harm one of the great sources of strength of the Australian economy,” Mr Narev said, speaking at the Australia-Israel Chamber of Commerce event.

    “It will impact overseas investors’ view of the strength of the Australian banking system.

    “We’re in a good position to judge that because every day we are in the funding market. We are talking to debt investors, we are talking to equity investors.

    “It will divert resources and management attention at a time when the global economy remains volatile.

    “And for all that, it will not produce any results that good strong regulators, buttressed by the government’s announcement, couldn’t have achieved anyway.”

    The bank did not fear scrutiny, Mr Narev said.

    and then….

    “There is not a single ­discussion I’ve been part of that leads me cause to be concerned about scrutiny at all.’’

    He noted many Australians had a financial interest in his institution.

    “This big bank is owned by 800,000 Australian households directly, with millions more with their investment funds who collectively have about $100 billion of their wealth tied up item CBA,” Mr Narev said.

    “For many of them, the ­difference between a good dividend and a great dividend really matters to their decision about their standard of living for the next six months.”

    His speech came as the industry lobby group, the Australian Bankers’ Association, unveiled the banks’ plan to bolster the reputation of the sector.

    Other measures include a review of problem areas such as sales commissions and the processes for handling poor conduct among employees.

    Product sales commissions and product-based payments would be reviewed “with a view to removing or changing them where they could lead to poor customer outcomes”, the association said.

    • There must be so much hidden SHIT waiting to be found I am amazed by this response.

      In truth someone sitting on the fence would likely be swayed toward the RC argument by such a rant, it a display that would make even the naive suspicious !

      And my guess is that its is systemic SUB PRIME !

      • GunnamattaMEMBER

        I had a car full of mine and others kids………

        all of whom heard a large grumpy man roar ‘Absolute fucking bullshit!’ as I listened to the soundbite the ABC news played. For the life of me I am stunned not a single news outlet seems to be running it this morning

      • ‘Fraud rife in banking system, loan application numbers fudged: economists’

        But Mr David and Mr Soos argue that it is not merely a matter of individual loan officers inflating figures to make loans and meet targets.

        They describe it as a form of “control fraud” that goes to the top of organisations.

        They argue bank executives have a direct interest in exaggerating the credit worthiness of loans in order to secure cheap funding.

        The economists also argue that it not possible that banks could have maintained credit quality while property prices have soared relative to incomes

        http://www.abc.net.au/news/2016-04-21/fraud-rife-in-banking-system-economists-say/7348176

      • another meaningless digression. The post and comments are about banks and the possibility of their review – not your ancestry, their occupation, or even (in the first instance) an international capitalist conspiracy to feed us all to the 0.01% (using banks). Please try and come somewhere near to the subject at hand. Spambot. Your inquiries on spam management will be welcomed at [email protected]

      • He half sounded desperate and half sounded mafia-like “my friend, be smart, you-a don’t wanna go-a there”.

      • ErmingtonPlumbingMEMBER

        “Please try and avoid meaningless digressions – Spambot”

        Right,… Skips attempts to have readers contemplate the wider institutional processes behind our current socio/political/economic order = “Meaningless digression”

        But,…AJs and others constant denigration of an entire Generation ! (Boomers obviously) equals some kind of intelligent, thoughtful analysis of the Above subject!!??

        For those who find Skip hard to understand,.. may I suggest MSN, you won’t have any problems then.

        As for those that celebrate Migs removal, I think your a pack of thin skinned boring Cu#@$.

    • What do we want?

      AN INQUISITION (into naughty costomers)

      When do we want it?

      NOW (At the office of Mossack Fonsecca, Parasites Crt, Panama)

    • There it is!! The Boomer Bribe – you own a bit of us, do this and you might lose money; didn’t you benefit from asset price increases, do this and you might lose money.

      (And I’m pretty sure when he refers to living standards, he’s referring to his own)

      • moderate mouse

        Interesting isn’t….how the growth in ‘mum and dad investors’ can have wide-ranging impacts on society’s priorities. Narev wants to protect his ‘customers’ dividends. Says a lot.

      • Mum and dads, meaning wealthy Japanese mum and dads invested via a pension fund, which is invested via an international nominee company.

    • So to paraphrase Narev:
      “don’t investigate us, we’re making too much money”
      “be careful what you wish for”
      “welcome to the Bates motel”

    • ErmingtonPlumbingMEMBER

      “A Royal commission into banks would damage the economy, undermine confidence in the nation and potentially hit living standards, the chief of Australia’s biggest bank says.”

      If you changed the words banks and bank with the words Unions and Union, above, you’d have yourself an old school, none to subtle threat of economic Vandalism.

      Bankers are the real thugs, not unions.

    • Mining BoganMEMBER

      That reads like the 3am/red wine series of text messages from a spurned lover. Sad.

      Unfortunately, it also reads like said spurned lover is a bit screwy and could get violent. Australia may well have to get a restraining order against the banks.

    • ““This big bank is owned by 800,000 Australian households directly, with millions more with their investment funds who collectively have about $100 billion of their wealth tied up item CBA,”

      Translation: Don’t tread on me.

      What a giant jenga tower this whole rotten show has become.

    • billygoatMEMBER

      @ Gunnamatta. Thanks for the transcript. As a non share owning, employed renter of a little landlords poorly kept [email protected]#t box I personally could not give a FF that: “For many of them, the ­difference between a good dividend and a great dividend really matters to their decision about their standard of living for the next six months.”
      It is apparent to me that no person, private or public institution is remotely interested in my standard of living for the rest of my life let alone the next 6 months. I know I have personalised the issue however what is particularly galling is that if a RC was held it would be discovered that the dividends are paid from the proceeds of white collar crime. Those 800,000 share holders get to go on tours of the Rhine valley, enjoy extended stays in third world countries living like ‘rich folk, pay their adult children’s rent/mortagage deposit etc ‘- ALL OFF THE BACK OF CRIMINAL ACTIVITY – sorry for shouting – Fraud is crime!

  4. I hope someone has been on the blower to Deep T! I mean, now that they’ve retired, there must be a treasure trove of info able to ooze forth. But I guess there’d be that invisible hand, gently squeezing their shoulder and saying ” I wouldn’t do that, if I were you….”

    • Of course, you wouldn’t call for a Royal Commission without knowing the main resulting outcome.

  5. I do not get why the ALP has the guts to go after the banks but not have taxpayer-funded elections.

    If the upper house is controlled by the ALP and Greens, and the ALP win the 2016 election, they can surely stop being puppets of big business.

    • “I do not get why the ALP has the guts to go after the banks but not have taxpayer-funded elections.”

      To be flat out cynical, as a whole they aren’t interested in good governance, they are interested in power. If getting political donations assists them in reaching the goal of sitting in the big chair then it is a case of ends justifying the means. Politics is a business for the major parties. The question is whether it is any more than a business to them.

      And, to counter that cynicism, I’d say that it has been a natural drift away from good governance. The system has not been under proper scrutiny so keeps shifting into darker, and darker regions. And as this shift is over time it all becomes a new normal.

      Just prior to last year’s QLD election Tony Fitzgerald gave an excellent interview to the 7.30 report. I’ll paste a little bit of it below, it is worth the time to watch or read it.
      http://www.abc.net.au/7.30/content/2015/s4170096.htm

      LEIGH SALES: Let me ask you: the former head of the Independent Commission Against Corruption in New South Wales, David Ipp, said last year there that there needs to be a federal anti-corruption agency established with the powers of a standing Royal commission so that people can have confidence restored in government and know that abuse and misuse of power can be uncovered. Is that something that you support?

      TONY FITZGERALD: I think it’s self-evident. The people who go into State Parliament, who go into the major political parties are the same people who go into those parties and go into Federal Parliament. I don’t think they’re any different in one group or the other. They’re people who, for one reason or other, are prepared to buckle down and do what the party wants, to advance the interests of the party, to advance the ideologies of the party and to advance their own interests. I can’t understand why they’d be corrupt at one level – or be corruptible at one level and not at the other. So, that’s not to say I know of any corruption in the federal system at the moment, but I’m pretty sure you’d find that if the digging started, there’d be bones at the bottom of the hole, you know.

      But I’m concerned on a wide range of things about government in Australia, but in particular, the idea that the people who are now running politics are professional politicians, learning all the bad habits in political office. Nearly all members of Parliament now will have done a stint in the party office, a minister’s offers or an associated entity’s office. We need to get people who are independent, who’ve taken – who’ve learned and exercised values outside the political system. So that’s my broad concern. My more specific concern is that Queensland is particularly vulnerable because of its single-house status and because of its history. And I think I can say that both Gary Crooke and I independently saw the – by no means I’m not suggesting corruption of the sort we saw 25 years ago. But the same sort of practices starting to take hold. That – not necessarily with the people presently in office, but in 20 years’ time, 15 years’ time, maybe 10 years’ time, we’d have all the bad, old habits entrenched again.

      • Flexians:

        Examples

        In Shadow Elite, Janine calls them “flexians”, top players who move in and out of government, corporate, and think tank roles, gathering exclusive information at each stop, and using that privileged asset to benefit themselves and their allies.

        Linda Keenan: Shadow Elite : Think BP’s The Bad Guy? Think Bigger, Way Bigger

        The contrarians we studied — who systematically sought to undermine the scientific evidence of the harms of tobacco, acid rain, the ozone hole, DDT and global warming — engaged in many of the same kinds of behavior as the ‘flexians’ described by Wedel.

        Naomi Oreskes: Shadow Elite: “Merchants of Doubt” — Do Scientific Denialists Have No Shame?

        These players (I call those at the pinnacle “flexians”) glide across roles of influence in government, business, media, and think tanks, use overlapping affiliations and information gleaned in onevenue in other venues, and exploit a stranglehold on (should-be) public information to advance their own interests, not the public interest.

        https://psmag.com/meet-the-flexians-110946356f8#.6d4n9nfvx

      • Well said foots
        Turnbull rails against corruption but refuses a Federal ICAC
        AML deja vu

      • “Now I will tell you the answer to my question. It is this. The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power, pure power. What pure power means you will understand presently. We are different from the oligarchies of the past in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just around the corner there lay a paradise where human beings would be free and equal. We are not like that. We know what no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power. Now you begin to understand me.”

    • The ALP don’t wish to change the banking system, just clean up some operational issues, the banks have lost control as they got too big. Nothing will really change until after the smash, the corruption is too embedded now. You have to change the system to take away the incentive and ability to blow bubbles to maximise bonuses.

      Something like going back to the late 60’s early 70’s. The AOFM should issue 3 month, 6 month and 9 month Treasury notes as a basis for RBA held bank reserves somewhere between 30%-40% of deposits. These should be funded by a levy of $10 billion a year from retained earnings and $10 billion a year from transferred bank deposits so they would build slowly.

      That would be a start on trimming the wings of these turkeys who think they are eagles.

      • That’s what they did before Keating deregulated.
        I agree if they want to have 80% of the country’s deposits, they should be fo

      • That’s what they did before Keating deregulated.
        I agree if they want to have 80% of the country’s deposits, they should be forced to hold a large fraction as safe assets. And their mortgages should be bulletproof ie 60% LVR’s.

      • So that sounds like a scenario in which only entrenched parties and independently wealthy individuals can have political influence.

  6. It’s like (the late) Pablo Escobar saying “There should be no royal commission into the drug trade, as it is a vital industry for Colombia”.
    Mortgages are the new cocaine.
    Narev deserves the same fate as Pablo.

  7. St JacquesMEMBER

    The warning that a Royal Commission would bring down the economy is a thinly veiled threat aimed at the whole nation. They are warning the people of Australia that they are above the law, and that they own the country. Only imbeciles haven’t figured that out yet.

    What’s the difference between blue collar and white collar crime? Billion$

    • moderate mouse

      +1… It’s that bad. That Narev has the hide to mouth off indignantly like this, and that many people will listen, shows how far down the rabbit hole we’ve already gone.

    • “They are warning the people of Australia that they are above the law, and that they own the country. ”

      So they’re just calling it as it is?

      • Narev then also went onto say that if the peasants are hungry why can they not eat cake?

        Don’t expect someone who is so out of touch to say anything else.

  8. An ANZ mortgage broker approved an investment loan for an apartment in the city for my friend. Her source of income at the time was Centrelink and still studying at uni. Her Chinese parents stumped up the 100k deposit though.

    Long story short, she was wise to sell at the start of the year and pay back her parents the 100k.

    • As I’ve recounted previously. My daughter’s friends parents stumped up the deposit on a unit for her ( “It’s the only way I can pay off my student loan”) AND went guarantor for the balance. Lo and Behold ( or “I told you so! You should have done that for me..” was our daughter’s response on hearing that…..) the unit escalated in price. Did her friend, as your wise Chinese friend did, sell up and repay her parents and the student loan? Nope! “Property never goes down” so she ploughed her ( her parents!) newfound equity back into an additional unit…..

      • Your daughter will thank you.

        I drove into work yesterday and saw a construction site for a new apartment block while crossing the bridge onto King Street Melbourne, (next to crown car park). There was a massive banner draping the construction site with developers name, “Equity Central”.

  9. What justification is there for not scrutinizing banks by a system other than the status quo (totally inept) and not the banks themselves?
    Who would agree not to have such scrutiny?

    No commission means continued illegal Chinese property investment, scam after scam, locals being ripped off and locked out of housing, ridiculous ATM fees etc etc etc etc etc

    KIDS……LEAVE AUSTRALIA….THE DUMBPHUCK WEAK NATION OF 2016.

    We have the most corrupt financial system on earth.

    • Sorry but Oz did not create the conditions which over some decades culminated in the GFC….

      Skippy…. were more like the South American counter party to a much larger show….

      • What’s different aside from the securitization of the loans? The basic ingredients are the same. Why try to hide behind a corkscrew?

      • Kodiak…

        Your question should be… is it securitization – in of its self – or is it the – quality of instruments – used in securitization and how if the instruments are diminished and why.

        Skippy…. more to the point… what events lead up to the rampant increase in financialization… whom drove that agenda and why. Why did productivity and wages diverge, why in the face of that was credit issued when real wages were stagnate or worse deflating, too the point credit standards were lowered or worse spaghettized through complex mathematical risk tools.

      • 1997, income growth has all gone to the top 10%, completely skipping the bottom 90%.

        From 1997 (start date of full-on Fantasy Finance) to 2007, $23 trillion in securitized debt was sold.

        From 2007 to 2009, US households lost an estimated $17 trillion in assets, and there was a $6 trillion loss over in Europe ($17 trillion plus $6 trillion equals $23 trillion)

  10. reusachtigeMEMBER

    Ahahahahahahahaha! – That raging lunatic who talks gibberish and makes no sense to anyone other than his own lunatic mind is being pulled up by the spambot. That sucks, I love skipping over his comments. He a ledgend!

    • That you fail to recognise the irony of your comment is stunning, but quite revealing.
      I’ve always thought you were on here to make cryptic utterings for entertainment value. I’ve actually never seen a considered contribution from you, but you’ve got the gall to deride another who puts some effort into providing real information of interest. High five buddy!

      • Reusa is a shaft of gold when all around is black. Skippy is to be condemned for his tireless toiling to deflect comments threads. Skipping Skippy with the certain knowledge I miss nothing is one of the pleasures of MB.

        I heartily approve of the Spambot deletion of Skippy’s guaranteed drivel above.

      • David….

        Your gripe is about proforma and not the information provided, more emotive than actual evidence based. Deletion of comments is just removing information, that should worry anyone imo.

        If you do have an issue wrt to any comment I’ve made it would be your case to show why, just saying troll, is trolling itself. Which could be also labeled on reusachtige, the commenter has never, in years, actually added anything other than slap stick.

        Skippy…. Great to see the above thread comments never engage in any meaningful dialogue…. just ideological tastes…

      • Bob….

        Boomers is a pop culture term which has become the domain of ideologues used arbitrarily to compartmentalize massive swaths of humans, born over decades and across huge geographical expanse… just to incriminate them as the defacto source of all of humanity’s problems.

        Skippy…. One can find the same logic in the old testament imo….

      • Your gripe is about proforma and not the information provided, more emotive than actual evidence based. Deletion of comments is just removing information, that should worry anyone imo.

        Vague and opaque information is worse than useless.

        You *can* write clearly, coherently and succintly, we have all seen you do it.

        That you choose not to belies objectives other than informing… “imo”

      • ErmingtonPlumbingMEMBER

        “Please try and avoid meaningless digressions – Spambot”

        Right,… So Skips attempts to have readers contemplate the Machinations and institutional processes behind our current socio/political/economic order = “Meaningless digression”

        But,…AJs and others constant denigration of an entire Generation ! (Boomers obviously) equals some kind of intelligent, thoughtful analysis of the Above subject !!??

        For those who find Skip hard to understand,.. may I suggest MSN, you won’t have any problems then.

        As for those that celebrate Migs removal, I think your a pack of thin skinned boring Cu#t$.

      • @ Erm – Agree. Some on here don’t have the capacity for contemplation.
        I was a bit ticked off by spambot in another comment on this page where others were clearly spamming Skippy, but only his comments were caned, so go figure. They were either real bad, which I doubt, or the spambotter was having a moment.
        I would be disappointed if Skippy wasn’t a contributor to the blog. Do I always agree or understand? – no. Does he make me think? – definitely yes. I think it’s more an envy issue with some bone heads – the tall poppy thingy imo.

        On this particular thread, several posts were deleted which some people would have missed. I saw them because I was in the thread, but wordpress being what it is I got the emails which enraged me no end, but my responses to the garbage were deleted also. It was getting to be a slap contest so I ran up the white flag on the bottom of the page, and while the bot deleted my actual comment, his insertion was pretty much what I tried to achieve. I still reckon Skippy was dealt with too harshly btw, but the bot owns the blog. Hope this clarifies.

      • drsmithyMEMBER

        OK doc, but I still don’t understand what you are saying.

        Oh, please.

        Skippy’s posts are dependably opaque, rambling, impenetrable and difficult to understand, for a variety of reasons ranging from poor grammar through assumed knowledge to unexplained logical leaps.

        Yet he occasionally writes something that is clear, concise and direct.

        Therefore, it is obvious that he deliberately chooses to make his “information” difficult to interpret and digest.

        So having a go at others for “removing information” when he deliberately makes his “information” so difficult to understand, is a bit much. Especially since the first thing he usually does whenever someone quite reasonably points out how difficult his posts are to understand and could he please write a little more clearly, is attack and accuse them of trying to derail or misdirect the discussion.

        “If you can’t explain it simply, you don’t understand it well enough.”

      • Doc I’m not trying to yank your chain, I was genuinely puzzled by your comment. I originally thought it was for me as I didn’t connect the links thoroughly. But you’ve clarified your view and you’re absolutely entitled to it, although I have an alternative view. Now I understand, but to me it’s not an important issue imo.

  11. TailorTrashMEMBER

    “This big bank is owned by 800,000 Australian households directly,” ………..and they can take care of things when I piss off with my $50 million in salary and bonus which I “earned ” by selling innovative loan products to foreign non citazens to purchase their homes and to make speculative investments in dog box appartments
    that destroy the amenity of their once beautiful cities ………….”For many of them, the ­difference between a good dividend and a great dividend really matters to their decision about their standard of living for the next six months.”…………………….and [email protected] their long term well being …………..now I better get back to the office to check on my bonus …………

    • I’m shaking my head in disbelief here. Narev doesn’t want a RC because the equity holders of CBA might lose something? How could that happen if there’s nothing to hide. I’m turning into the John Goodman character in the Big Lebowski.

  12. Sometimes during my lunch break I go down to World Square in Sydney for a walk, which is in the heart of Chinatown. What I have seen consistently down there recently is a CBA stand trying to hustle Asian customers for home loans. I have never seen this before by any bank.I was amazed. I have seen the likes of Citibank trying to sign up people to new bank accounts or credit cards, but never home loans.

    • Mining BoganMEMBER

      I’ve seen it in airline lounges.

      Also once on a very special occassion they hsd one set up in the dry mess in camp.

      Their greed knows no bounds.

    • Locus of ControlMEMBER

      A few weeks ago people on here, myself included, were commenting that CBA was making them unsolicited offers of credit by way of a cold-call telephone call. Personally I was made a ‘special offer’ of a credit card, someone else was made a ‘special offer’ of a home loan (WTF? – wouldn’t YOU approach the bank for a home loan when YOU saw a house you were interested in? Not – “oh, here’s $400,000, go find a house to spend it on.”). I can only conclude CommBank’s credit growth has plateaued and they’re scraping the bottom of the barrel to meet unrealistic targets in a low-growth economic environment. Which is worrying. Just how credit-worthy will the recipients of their credit be going forward from here?

  13. “The banks have trashed their lending standards over a prolonged period of time with significant evidence of banks massaging people’s incomes in their loan application forms to make them look a lot more creditworthy than what they really are, which is essentially fraud,” Lindsay David of LF Economics told the ABC’s Lateline program.”

    “The banks employ lenders who are bonused on the number of loans they write. They put them under enormous pressure to meet sales targets so if they don’t meet their targets, they’ll be sacked,” he said.”

    http://www.abc.net.au/news/2016-04-21/fraud-rife-in-banking-system-economists-say/7348176

    This can’t be true, the Coalition has been saying all week that “we have a tough cop on the beat” in ASIC. The Coalition wouldn’t lie to us!

    • That doesn’t make any sense. Banks don’t share individual application details with anyone so the creditworthiness of the book is determined by the arrears rate and LVR, not the borrowers capacity to pay. If they take on crappy loans (regardless of what might have been forged in the app form) their arrears rates go up.

      So to suggest that falsifying loan apps is some grand conspiracy from the senior management of the banks is silliness.

      That’s not to say brokers (often independent) don’t forge apps. I am sure that that is common.

      • “If they take on crappy loans (regardless of what might have been forged in the app form) their arrears rates go up.”

        Is that necessarily true in the short to medium term? I’m no expert in this area, far from it, but it seems to me many dodgy loans may perform ok while the broader economy is doing well and house prices are going up. The question is how well will these loans perform when things start to turn sour or there interest rates rises? Even moderate economic growth can cover up a lot of rot.

      • The house price going up, while good for the borrower and lender, doesn’t affect the ability to make repayments. Yes rates going up obviously does and lenders will generally factor some rate increase into their models (as should borrowers).

        The other side of serviceability is income – banks don’t usually factor into account a chance of job loss into their calculations (as it is really a binary outcome) but cover for it with asset cover ie: banks accept that if you lose your job and don’t get another then you will probably have to sell your house.

        None of these mean that banks have an incentive to take on actually crappy loans.

  14. I was going easy on you steernorth with an off the cuff “settle down” comment, but I’m not going to ignore your personal attack. The gloves are off!
    Your continued babbling about boomers is trite and without any basis whatsoever. See https://www.yourlifechoices.com.au/retirement/news/boomer-babble?utm_medium=email&utm_campaign=Volume%2016%20Issue%2049%20Daily%20eNews%20Wednesday&utm_content=Volume%2016%20Issue%2049%20Daily%20eNews%20Wednesday+Version+A+CID_1a8b3a4476076ea1cd14b7e4268374a7&utm_source=campaign%20monitor&utm_term=set%20the%20record%20straight

    Your continued barracking for young people to leave Australia is borderline juvenile. Your assertion that Australia is the most corrupt nation on earth is uninformed and quite frankly absurd. http://www.cnbc.com/2016/01/27/these-are-most-corrupt-countries-in-the-world.html The initial sentence in your “considered comment” doesn’t even make sense.

    What you and others in this place fail to identify is that this corruption of corporate and political processes has been ongoing for fifty years. http://www.academia.edu/430995/_2010_Revisiting_50_years_of_market-making_The_neoliberal_transformation_of_European_competition_policy
    It is only within the last few years where the public are beginning to understand that the entire system has been gamed globally by the top percentage wealth elite. The systemic financialisation of the global economy has reached a tipping point where a global recession/depression is imminent. http://fortune.com/2016/01/11/stock-market-recession-2016/ The GFC will pale into insignificance when the other shoe drops within the next five years and no one, including you, will be impervious to the negative consequences. Europe is in financial, social and political crisis. The China boom is over and India will not be the next economic boom frontier – the only productive resource they have is a largely uneducated population. The USA is a political and financial quicksand with the only substantive economic footing their war machine. The world is awash with cheap commodities which can’t be sold anywhere because no economies are growing. People are now understanding that creeping neoliberalism is destroying a way of life and threatening the health of the planet for future generations. Is that boring enough for you?

    • Malcolm. I would add that many boomers are children of ‘depression era’ parents and I for one have been inoculated with a work to save to invest ethic. There are many younger boomers who may not have benefited from this shadow cast upon us from an earlier disaster.

      Steer North shows an ability to find simple answers to complex issues (in this instant) which is unfortunate for him.

      • Spot on Tony. The boomer meme is just a convenient scapegoat for all that ails the economy it seems from some commentators. It’s akin to stating the millenniums are self entitled globe trotting latte slurpers. Neither are statements of fact. Buying into the hype creates divisive arguments which detract from the real issue of the wealth and income shifting that is prevalent in the upper echelon of society. Wars were fought to take away the heritage of these parasites and yet here we are again on the brink. The only intergenerational theft is that which our politik have neatly created of double digit unemployment where young people have never held a full time job for ten plus years. The ramifications will be felt for generations as these people become angry at their sidelined status and take a nothing more to lose position..

        We can all come up with war stories about individuals we know who are gaming the system, but they are not all retirees or boomers or whatever – it’s right across the age spectrum. These are outliers and as the statistics demonstrate, overall people of all age groups are hurting. Some more than others. What bothers me is that some commentators when they mark their ballot papers will buy into the spin and the bastards that are tearing this country apart will get back in with disastrous effect. Imagine another three years repeated of the nonsense we have seen to pull apart the social fabric of Australia. Governments are supposed to work for the people and not the corporates. If society unites against this unfairness instead of bickering over irrelevant stuff fed to us by the media then things can be turned around.

  15. The government should have just agreed with the RC proposal. Inviting the banks in for a chat just makes it look like they are in cahoots with each other. If you are the government, you don’t just chat with miscreants, you pass laws, hold inquiries, initiate court proceedings, etc. You use the law of the land, not a gentlemen’s agreement. All they have done now is just illustrate how incestuous they are. To the uninterested it looked vaguely like a campaign fundraiser. All I could think of was all the other times the PM and Treasurer had admonished banks to be nice, right before said banks just did what they wanted anyway.

    It’s like all they have done is dither, admit there is a problem, and then provide a weak ‘solution’ no one believes will work anyway. They’ve been wedged on an issue that literally has no votes in it for them, banks can’t vote. I honestly don’t get it

    • @Nathan ”The government should have just agreed with the RC proposal. Inviting the banks in for a chat just makes it look like they are in cahoots with each other.”

      They are in cahoots and that is why the RC will be fought to the last breath the last halfpenny of taxpayers money……….

  16. adelaide_economist

    OK, so here’s the thing with Australia.

    We were supposed to be ‘very careful’ about the resources tax because of all the good things the (big) mining companies do for Australia… even though they are, what was it, 85% owned by foreigners.

    We shouldn’t look too closely at negative gearing/CGT exemptions because we must be ‘very careful’ not to interrupt the wealth plans of ‘mum and dad investors’ (all 7 or 8% of taxpayers isn’t it – very broad based not); we mustn’t ask why it is that the only way to get ahead in Australia is to buy houses and speculate on their value.

    Now we’re supposed to be ‘very careful’ about enquiring into banks because the shares might go down… even though a very large minority, if not majority, of the shares in our major banks are held in custodianship by very large foreign banks…

    Hopefully enough people can see that the country is heading into the sh**ter at a rate of knots and realise that BHP and NAB and the REIA don’t give a rats about the average person, their kids or their retirement plans.

  17. Well said – letting things go and sticking to the general theme of the post would be a seriously good idea for some here today.
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  18. By now only the dumbest of the dumb would believe that voting for political parties matters.

    Banana republic comes to mind

  19. Banks seem to be crapping themselves!!! Just got an email from NAB about the industry making changes to make it easier to do business with them and to regain community trust… load of rubbish of course but a Royal commission threat seems to have put them on edge!!!

    • Received something similar from ANZ. They can f*ck off. Charging ATM fees and all sorts of other bullsh*t fees

  20. Nothing will come of this for the banks except a greater concentration of power via elimination of competition through additional regulation, increased profits (paying staff less) and more criminality.

    We’re all their slaves and our parliamentary representative are their puppet minions to help them achieve undeniable evil.

  21. Having a Royal Commission into ‘banking’ will do sqiddley-dot. Royal Commissions are just very expensive, political ‘ping-pong’ imho. I am not saying that the banking industry in Australia does not need investigating but the trouble all started when banks came into being back in the 1890’s….Federation of Australia etc but the problems we are having right now are due to Keating deregulating the Australian banks in the 1980’s at the behest of the IMF and frigg knows who else. Keating got given his award of ‘World’s Best Treasurer’……banks were ‘opened up’ and made available for sale. This was the beginning of the sell-off of Australia. Prior to Keating’s implemented changes all Aussie States had had their own banks and could effectively issue interest free loans/money to their State Govts for hospitals, schools but that was changed-quick smart. Now States have to borrow most from overseas and with interest. Before we sort the Australian banking industry we need someone with honest intentions to enter our Australian Parliament House……. unfortunately he died way back on 31st January 1606.
    I am not an LNP voter btw.

    • Well put raspberries, it all started with de-regulation and privatisation. Think about the whistleblowers from CBA and the corruption scandal as well as this:
      http://www.theage.com.au/business/banking-and-finance/cba-boss-ian-narev-talks-tough-on-unreasonable-unhappy-customers-20160420-gob726.html

      Did this kind of thing happen when the CBA was regulated and in public hands? No. Due to the fact that at the time, the Great Depression was still fresh in people’s minds as well as the minds of the dodgy elite. There was the will to stabilize things.

      ““This big bank is owned by 800,000 Australian households directly,”……as opposed to when the bank was in public hands? A public utility is owned by everyone, all the people of a country. How many millions of people owned the Commonwealth Bank when it was in National hands?

      That was the thing my economics lecturer told me about the privatisaion of telstra. he was remarking on the ads at the time which said “by buying shares, you can own a piece of testra”. he said, when telstra was owned by the govt, 20 odd million people owned telstra.

      The government was administering the utility on behalf of the people. I have mentioned this before..it does not necessarily have to be govt that administers it, it can be non-profit or private entity. However they need to treat it as a utility (heavily regulated and transparent to minimise opportunity for corruption), not as a exponential growth model to the moon enterprise, as this encourages corruption. it is the exponential growth model – fundamentally flawed, which leads to problems, it is not sustainable. When peak growth is reached the system starts to cannibalize itself and collapse.