ANZ’s Lord Ponzi battles ASIC

Via the AFR comes the chutzpah of the roving cavaliers of credit:

ANZ Banking Group chief executive Shayne Elliott has rebuffed Australian Securities and Investments Commission chief prosecutor Dan Crennan’s ambitions to lock bankers in jail, arguing regulators should prioritise a “fully functioning financial system” to support the economy.

Mr Elliott warned the corporate regulator’s tougher enforcement of responsible lending laws is hurting would-be borrowers and crimping credit flowing to the economy because fearful bankers have become overly conservative in approving loans.

The ANZ chief said ASIC’s more stringent interpretation and application of lending standards meant some home buyers and businesses “will find it harder to borrow”.

As they should. As the name suggests, it’s called “responsible lending”. Darth Ponzi’s recent push into pyramid mortgages sure doesn’t qualify:

ANZ is set to overhaul lending to property investors by doubling the maximum interest-only period from five years to 10. It will also increase the maximum loan-to-value ratio from 80 per cent to 90 per cent.

Also at the AFR, ASIC head James Shipton is holding the line:

“This leaning into the future is a very real and very practical imperative. In only 50 days since the handing down of the royal commission’s final report, we are already reading criticisms of our approach to litigation,” he told The Australian Financial Review Banking and Wealth Summit on Wednesday.

Mr Shipton said there was a belief in industry, which he said was misplaced, that ASIC would use its powers inappropriately, and “most importantly it suggests there are still things to hide”.

…”Unfortunately, industry has not made as much progress,” since the banking royal commission as ASIC would have liked, reinforcing the themes of trustworthiness, the economics and societal role of finance, and professionalism.

The battle to return banks to predatory lending is joined.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. Industry is absolutely right not to trust regulators, especially those who have telegraphed an aggressive approach. It doesn’t mean that industry still has anything to hide.

    • Sweet lawdy, I’m not sure my tissue box can handle the emotion of seeing a bankster being held to standard like this. I know it’s been a whole 3 months, but please refer to the Royal Commission before we start getting too worked up about regulation (or lack thereof).

      • Exactly. Both the banks and ASIC came out of the RC looking extremely poor.

        With this still fresh in peoples minds, I am actually surprised the banks are not at least acting in a more contrite manner.

        At least ASIC is signalling it will carry out its responsibilities and that includes using the criminal penalties allowed by law. This is not what Jacob describes as an “aggressive approach” – it’s effective regulation and what they should have been doing a long time ago.

    • ‘Industry is absolutely right not to trust regulators, especially those who have telegraphed an aggressive approach. ‘ – Well yes. Seeing as the regulators know bugger all, are desperately trying to get jobs at the banks (lower ranks), have political ambitions (upper ranks), or are marking time to the sweet sweet defined benefits pension system.

      That being said, the banks have – and this is a technical term – a metric f*&k-ton of criminal behaviour to hide – mostly at the upper ranks. From helping money laundering enterprises, to looking the other way on dodgy fx deals to the middle east, to rigging bbsw, selling insurance to the dead etc etc. To be entirely honest, when it comes to washing money from every manner of sin, the Aussie banks put BCCI to shame.

      Excellent, two sets of criminals looking to blame each other – ideally there will be some public airing of dirty laundry. Go long popcorn.

      And because its easy – why are ASIC’s staff, those negligible negligible retards, also not up for criminal sanctions? If option claw-backs are good enough for bankers, maybe pension claw-backs would work for govvies?

      You’re a regulator, or politician, and it turns out you did squat because it was easy. No pension for you. Why not?

    • Good grief Jason must be a banker… Imagine if a drug dealer was caught dealing drugs. Then complained when the book was thrown at him/her that they may face jail time? Oh but please officer think of all those heroin junkies who wont’ get a hit, think of all the pain associated with cold turkey? Please go light on me, I promise I won’t be bad. We can give them methadone instead can’t we?

  2. It will give me great pleasure to watch Shane Elliott and the bank he leads go down the tubes — hopefully, for Elliott, in absolute disgrace.

  3. Regulators want blood…and these banks are still thinking they can push back again and make it like it was in the past…call regulators bluff…big difference this time is the banks have dealt with their humiliation and moved on, regulators haven’t and need to prove they have changed…with labor coming in they will find even more support….it would be foolish now to try and push the regulators who how now nothing to loose by coming down hard and proving that they are now doing their job,,,,

  4. Well, I’m all for longer jail sentences in general a la USA. I mean:
    1) Police can have a good laugh as someone gets 10 years for stealing an apple;
    2) Politicians bathe in the limelight for coming down hard on crime;
    3) Prison industry business is booming – I mean, how much do they make per prisoner? They’ve got more people inside than Stalin had.
    Ok, so a few poor saps will end up doing 30 years for stopping briefly on a double yellow line, but it’s all for the greater good.
    However, bankers? I’m not so sure. The lifeblood of the economy and great chaps to have a drink with at the yacht club. Hmmmmmm