Bank Royal Commission back on political radar [Updated]

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By Leith van Onselen

After narrowly holding-off a banking Royal Commission in September, it is back on the political radar with Coalition MP George Christensen pledging to support Bob Katter’s banking Royal Commission bill. From ABC News:

Coalition MP George Christensen told the ABC he intended to support Independent MP Bob Katter’s bill for a royal commission if it was put to a vote.

It was introduced in October and will be rewritten with changes. It is unlikely to be reintroduced before March.

On Twitter, Mr Christensen said he had spoken with Mr Katter about the issue, saying the bill “will have my support”.

ScreenHunter_17342 Feb. 09 08.21

Labor and the Greens also want a public inquiry into the banks, which the crossbench has generally supported…

With Mr Christensen’s support, Mr Katter’s bill is more likely to pass the House of Representatives if it is put to a vote.

However, only a government can set up a royal commission.

As noted above, a resolution alone cannot force a Royal Commission, since only the executive government has the powers to create one. Therefore, the Coalition will need to be pressured/embarrassed into a banking Royal Commission.

The rationale for pursuing a Royal Commission into the banks remains as compelling as ever and includes:

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  • damning evidence of bank 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
  • overall dodgy lending standards.

The corporate regulator, ASIC, has also proven utterly inept in investigating and prosecuting these cases, meaning there is little choice but to conduct a sweeping Royal Commission into the banks’ practices. Do-nothing Malcolm’s million pseudo investigations have simply handed regulation to the banks themselves.

Addendum:

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George Christensen MP has responded with the following clarifications [direct quote]:

  • I won’t be supporting any parliamentary motion on a banking royal commission. They achieve nothing but a political point-score against the government.
  • I have talked with Bob Katter about introducing a private members’ bill to set up a Commission of Inquiry into the banks.
  • A Commission of Inquiry is the same thing as a Royal Commission with two slight differences. RCs are set up by the executive whereas CoIs can be set up by the Parliament. Likewise, RCs report to the executive whereas CoIs report to parliament.
About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.