The AFR is reporting as much:
Banks will be forced to pay financial compensation and remediation to every bank customer who has been wronged, as the Labor Party signalled a tough response to the Hayne royal commission if it wins power.
The ALP has also signalled it is likely to pursue comprehensive consumer law reform and will be laying out some “clear markers” to ensure the banking industry improves its standing and weans itself off the remuneration incentives which led to many of the excesses put under the spotlight by the royal commission.
As they should. Giving the banks some big, dumb rules is also a much better approach than all of this waffle about “culture”.
The Labor rhetoric stands in stark contrast to the corrupt RBA which has been behaving appallingly in advance of the Hayne RC recommendations. First it was revealed to be working behind the scenes to be working against meaningful reform:
The Reserve Bank of Australia and Treasury have privately cautioned the Morrison government that any regulatory response to the financial services Royal Commission must be careful to avoid putting the brakes on lending to home buyers and business.
Then, last week, it’s ribald corruption broke into the open:
The RBA’s fingerprints are all over the CFR statement, which says “an overly cautious approach by some lenders to incorporating relevant laws and standards into loan approval processes may be affecting lending decisions”.
Bowen should be aware that there is a corrupt coterie in senior levels of the RBA and Treasury that will undermine every attempt to bring justice and new behaviour to banks to prevent themselves being blamed for any housing bust fallout. Bowen is planning to set up a Treasury task force but he should either do it separately or hand-pick the staff. They cannot be trusted to give national interest advice.
The RBA and Treasury are not on your side, Mr Bowen. They are captured by the banks. And they have, in turn, captured the Treasurer, from The Australian today:
“Josh Frydenberg declared he would do nothing to restrict the “free flow of credit”
“I’m going to be very conscious when working on the government response to the royal commission to ensure there is a free flow of credit in the economy and we don’t see a tightening there unnecessarily.”
Mr Frydenberg has already urged lenders to keep their books open as borrowers face more stringent loan applications resulting in smaller loans, longer processing times and less creditworthy borrowers being turned down.
Thankfully Frydenliar won’t be there to legislate a damp squib. Labor’s tougher stand reaffirms the outlook for interest rate cuts.
