Via The Australian:
O’Sullivan’s commission could do irreparable damage to the financial system. Everybody’s job, everybody’s mortgage, every loan to every business in the country was dependent on the strength and credibility of the financial system, they said, and O’Sullivan was about to lift the lid on a Pandora’s box.
With the help of a few of his Nationals colleagues, Labor, the Greens and a handful of crossbench MPs, O’Sullivan had just secured the numbers to blow open the casket. On the numbers, Morrison had lost control, and the executives of the major banks were terrified. For two years, they had claimed the sky would fall in should they be subjected to the glare of a royal commission.
Recessions, spiralling interest rates and housing market implosions were all forecast by a sector desperate to avoid scrutiny. Now, it was all but certain thanks to the O’Sullivan bill.
Lines of urgent communication were opened up between the banking sector and the Reserve Bank and the Australian Prudential Regulation Authority, the two regulators charged with protecting the stability of the financial system.
For Lowe and Byres, the national economic interest dictated that the government would have to take a different course from the one it had charted. A royal commission was “regrettably necessary”, the pair told Morrison.
In short, as the Australian parliament closed in on rampant bank corruption – against the wishes of the Government, banks and their shockingly captured regulators – the latter three colluded to retain as much of the sickened system as they could.
Labor, when you get in, call an inquiry into Australia’s rorted financial regulators. The senior ranks are ideologically and practically corrupt, operating far too close to the regulated, with the personnel of both overly intimate and cloaked by a democratically corrosive secrecy. The actual financial architecture between the two is broken as well, with a gulf of diffused responsibility opened at the heart of monetary policy.
The RBA and APRA would not know the national interest if it ran them over in a truck.
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.