Amid growing pressure to conduct a Royal Commission into Australia’s banking sector, and anger over the banks’ refusal to pass on in full Tuesday’s cut to the official cash rate, Prime Minister Malcolm Turnbull will established a parliamentary committee to scrutinise the banks’ mortgage rate decisions. From The Australian:
The House of Representatives Economics Committee would be charged with reporting back at least once a year on its oversight of the banks, providing a “regular health check” on the financial sector and holding the finance sector executives to account.
Announcing the move in Sydney today, the Prime Minister predicted the very existence of the inquiry would affect the banks’ decisions on whether to pass on future interest rate cuts.
“If they decide not to pass on an interest rate cut from the Reserve Bank, they will know that they’re going to have to front up to a House of Representatives committee and explain that and take questions about that and justify their actions in front of the elected representatives of the Australian people. I tell you: that will drive some cultural change at the banks,” he said.
Sounds scary. I’m sure the bank executives are shaking in their boots (not!).
But seriously, how would such a committee hold the banks to account for:
- their manipulation of the bank bill swap rate, which the banks have shown no contrition over;
- the 1000-plus examples whereby borrowers’ loan documentation has been forged by the banks (see here, here, here and here), again with little remorse shown; and
- their overall dodgy lending standards?
It wouldn’t, which is why it is just another political stunt by the Turnbull Government.
