It’s a rogue bank, simple as that. In the past year it has been exposed for:
- 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;
- losing 20 million accounts to god knows who, and
- failing to report most of it to regulators.
That’s not a culture problem. It’s not a problem of conflicting banking businesses. It’s not a problem with remuneration. It’s a criminal problem.
The CBA should be broken up. At minimum it should be hammered with Tobin taxes to slow its growth to next-to nothing so that others can overtake it in market share terms. APRA’s recent $1bn capital charge was a complete joke, just what one would expect from a captured regulator, amounting to just 29bps when NAB copped 100bps for a simple forex scandal 15 years ago.
Scott Morrison appears to have no idea what to do. Chris Bowen doesn’t look much better, pointlessly criticising Morrison.
It’s madness that this criminal bank carries the name of the sovereign and that it is publicly guaranteed, as Peter Costello said yesterday:
[banks are in] more trouble now than they were in the financial crisis.
The financial system was essentially designed to make sure the system was strong in a time of stress, and it was.
I think in the aftermath of that, some of our bankers started to believe it was all due to their genius, they should take the rewards and they took their eye off the customer.
The CBA brand is now up there with the Bandidos and Bomber Thompson as a failed icon.
Moody’s went so far yesterday to declare it a systemic risk:
The report comes against a backdrop of the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which has identified conduct and culture challenges at some of Australia’s largest financial institutions. We note that the franchise dominance of Australia’s major banks and their exceptionally low credit costs during an extended period of low interest rates may have elevated the risk of complacency in their approach to operational and governance risks.
Despite all of this, the way things are shaping up, the criminals at CBA will be asked to fix themselves. That’ll work.
It’s time to break it up.
