Via the AFR:
Commonwealth Bank of Australia’s new chief executive, Matt Comyn, and chairman Catherine Livingstone have pushed back on calls by Treasurer Scott Morrison for more heads to roll at the top of the bank, after the prudential regulator exposed a culture of arrogance and complacency at the nation’s largest lender.
After a scathing report found CBA’s board had insufficient rigour and urgency, and the bank had developed a complacent and insular culture, Mr Morrison described the findings as a “a wake-up call for every board member in the country” and said he expected additional departures from CBA.
As he pledged to restore CBA’s battered reputation, Mr Comyn said five of his direct reports had already left the bank and while “there are a lot of changes under way,” he refused to speculate on further departures.
And Banking Day:
CBA’s share price rallied strongly after APRA chairman Wayne Byres announced that the bank would only incur a A$1 billion “add-on” to its capital requirements that will be unwound when it implements the conditions of the enforceable undertaking.
“CBA has given to APRA an enforceable undertaking which establishes a framework by which CBA will demonstrate it is addressing the full set of recommendations made by the panel in a timely manner,” Byres said.
“Until such times as these recommendations are addressed to APRA’s satisfaction, an add-on to CBA’s operational risk capital requirement will continue to apply.”
CLSA banking analyst Brian Johnson said the regulatory capital mark-up was comparatively light.
“National Australia Bank copped a capital add-on of 100 basis points for its trading room scandal 15 years ago, but the CBA add-on equates to only 29 basis points,” he said.
Investors poured into CBA scrip driving the share price up by $1.35 to $73.17.
CBA chief executive Matt Comyn described the Laker report as “confronting to read” and admitted he had made mistakes in the past as a senior executive of the company.
However, he insisted he was the right person to lead the cultural transformation of the group.
“I think one of the strengths of being an insider, who knows the organisation really well, is I know all of the work that is going to be required, and I know how to get it done to implement these recommendations,” Comyn said.
“And that is exactly what I am going to do.
“All I would ask is that people follow our progress, hold me to account for the work that needs to get done as we get on and deliver it.”
Goodo. So what now, Scotty? From yesterday:
Treasurer Scott Morrison said he expects more high level resignations from the Commonwealth Bank following a damning report from the regulator into the culture of the bank in the wake of year’s money laundering scandal.
Mr Morrison said the report by the Australian Prudential Regulation Authority should serve as a wake-up call for executives and board members of other backs and financial service providers as well.
“We are taking action to ensure that this can’t happen again,” he said, citing the Banking Executive Accountability Regime legislation passed late last year.
Taking action! Nice one. How about some structural reform to address a structural problem? That’s what a serious treasurer would do. We have a banking system running riot on a public guarantee that has corrupted everything that it does. We need either the permanent revocation of the guarantee or something along the lines of a Tobin Tax that charges too-big-to-fail banks heavily enough that it slows their growth allowing smaller competitors to rebalance the financial system. Even Bob Katter’s Glass-Steagall offers a better blueprint than business as usual.
After all CBA is currently under investigation for or charged with:
- predatory lending;
- poor risk controls;
- fraudulent insurance;
- fraudulent financial advice;
- charging fees to dead people;
- manipulating BBSW;
- manipulating forex;
- money laundering for mafia and terrorists, and
- failing to report shit to regulators.
I mean, seriously, one could mistake this for an organised crime outfit. Does it really deserve a public guarantee?
You’re a joke, ScoMo, and CBA knows it.
