Anna Bligh is hard at work rebuilding trust in banking in South Australia:
The Australian Bankers’ Association will campaign against the South Australian government-imposed bank tax until the state goes to the polls next March if it is not defeated in parliament, including daily advertising in local papers and stationing an action group in Adelaide.
…ABA chief executive Anna Bligh, who discussed the campaign in Adelaide this week, said it was not the banks’ role to run state governments, but they did not want to see businesses, investors and mums and dads punished by the tax.
“Think long and hard about the impact a business tax will have in a state that needs business, needs investment and needs jobs more than any other state in Australia,” Ms Bligh said.
So is Mike Baird in NSW:
As premier of NSW, Mike Baird helped pioneer “asset recycling”, privatising public assets such as power stations and reinvesting the proceeds in new infrastructure.
Now, as an executive at National Australia Bank, Mr Baird is looking at ways the bank and its clients may benefit if governments overseas, or in other Australian states, follow in the privatisation footsteps of NSW.
Mr Baird, who started as chief customer officer of NAB’s corporate and institutional business in April, said on Friday that a key priority for the division would be the likely growth in infrastructure, where the bank acts as a financier and an adviser.
…Mr Baird first started at NAB as a graduate in 1989, and said it had not taken long to become familiar with banking jargon again.
He said he’d been made to feel welcome in the office though “hot desking” had been an adjustment, and he was occasionally stopped for “selfies” while on the job.
…Upon joining NAB, Mr Baird underlined the need for banks to rebuild public trust, and on Friday he said there was still “a long way to go” on this front despite the industry’s awareness of the need to change.
But we’ve come so far, says Ian McPhee:
The Australian Bankers’ Association set up the reform initiatives and governance oversight in April last year in an attempt to head off mounting political pressure after a series of scandals relating to commission-driven sales rocked the industry.
Former federal auditor-general Ian McPhee, who was appointed by the ABA to monitor the progress of reforms, noted while overall progress was being made, slippages were occurring in important areas.
“While we still need to see more rubber on the road, it is evident that there are early signs of the reforms starting to gain traction,” Mr McPhee said in his fifth report.
The six primary initiatives pushed by the ABA to improve bank culture were:
The way things stand, after 15 months of policy development bank customers are still in the dark about what the banks plan to do about improving their transparency.
“To date, the industry has focused on putting in place the industry-level reporting framework and has not been explicit about its intentions around public reporting by individual banks,” Mr McPhee said.
“It would be desirable for the industry to be clear on its position going forward, and even better if the major banks were to show the way in reporting their results.”
They’re too busy rebuilding public trust for that.
Rod Sims didn’t get the memo, Banking Day:
The threat of prosecution of banks for misuse of market power was dangled, rather than proclaimed, in a speech on Friday for the Australian Conference of Economists by Rod Sims, chair of the ACCC.
Using boilerplate, but ever relevant, language Sims reminded listeners that: “We as an institution are charged with identifying and prosecuting cartels, opposing anti-competitive mergers and cracking down on businesses that mislead or deceive consumers. In short, we work to keep Australia’s market economy working for consumers.”
“We also have responsibilities for intervening in markets that are not likely to work well for consumers,” Sims said, citing “natural monopolies in infrastructure”. Read ‘banking’ where you like.
He explained that “we’re in the midst of a policy debate about Australia’s ‘misuse of market power’ laws, and concerns have been raised against the sensible changes proposed by the Harper Review.”
“It is clear that some things never change,” he said.
Sims mused on the greats. “Hayek states: ‘What is harmful is …the ability of some monopolies to protect and preserve their monopolistic position after the original cause of their superiority has disappeared’.”
Then Trotsky. The vanquished opponent of Leninism once wrote, Sims said: “In a country where the sole employer is the state, opposition means death by slow starvation.
“The old principle, who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat.”
“As good an argument against monopoly as you are likely to ever hear,” said Sims –
without spelling out that he perhaps had the predicament of the 2017 Australian banking sector in mind.The ACCC chief, an operator with a Labor leaning vintage, spelled out wide choices ahead for his inspectorate.
“Many economists argue competition agencies like the ACCC should intervene in a market only if that intervention is likely to increase total economic welfare (a total welfare standard),” he said.
“Much of Australia’s competition law aims to deter conduct that is likely to ‘substantially lessen competition’, commonly considered to be closer to a ‘consumer welfare’ standard.”
A Sims’ star for the second is no denial of his belief in the first. Nowhere in his speech does Sims give much relevance even to finance.
“I think protecting the process of competition is the appropriate goal for a competition agency. Competitive markets are the most effective mechanism known to encourage the efficient use of resources. While there are exceptions, protecting the competitive process is the most effective way of maximising total economic welfare,” he said.
The banking industry inevitably sits ahead of others in any ACCC hit list.
Not if former premiers have anything to do with it.
