Recessionberg applies CPR to dead man Byers

Deary, deary me. They’ve all lived such lives of entitlement that really don’t know anything about public service at all. It’s all about drawing a preposterously large salary, which undermines the culture of public service in the first place, and then protecting it ahead of the public interest. To wit, the AFR’s conservative attack dog, John Kehoe, rides in to the save dead man walking, APRA head Wayne Byers, this afternoon:

…Outside pressure built on Mr Byres on Monday when financial services royal commissioner Kenneth Hayne broke his silence to publicly back all the recommendations in the APRA capability review and said it was consistent with the findings in his final report.

The Australian Financial Review has been told by government sources that the Morrison government backs Mr Byres to lead reforms at APRA and there has been no consideration to review his leadership tenure.

…The Treasurer believes he secured a guarantee from the Mr Byres to accept all recommendations of the Samuel review and assured that APRA will be given more money to do so.

Why does the Treasurer have to babysit the head of APRA to get anything done? That is self-evidently untenable. Recessionberg is only digging his own hole deeper.

Byers is thoroughly discredited. Via the SMH:

A rare public intervention from banking royal commissioner Kenneth Hayne could be aimed at ensuring his recommendations are not watered down by financial sector lobbying, former watchdog Allan Fels says.

…In a move that adds to pressure on APRA, on Monday commissioner Hayne made his first public comments since his report was handed down to government six months ago, backing the [APRA] capability review.

…“Any post-report pronouncement by Hayne will carry considerable weight,” said Professor Fels, a former chairman of the Australian Competition and Consumer Commission (ACCC).

“It’s very unusual for a royal commissioner, especially a former High Court judge, to speak after a report, but probably he is concerned about weak implementation of his report due to enormous pressure from the financial institutions, an enormously powerful lobby.”

Or, put another way, Hayne is concerned that a weak regulator led by a proven failure who is resistant to reform even after the endless parade of horrors in the RC will succumb to the lobbying.

Staff have no faith in Byers, previously at the AFR:

Working conditions in a division of the Australian Prudential Regulation Authority that was advising the banks on culture became so toxic that most of the team have quit in frustration over the last 18 months.

Many of those who threw in the towel have gone on to open thriving consultancies, including ASIC’s boardroom shrink of choice Elizabeth Arzadon, who resigned from APRA in May 2018 only to be scooped up by the corporate cop months later.

Former members of APRA’s governance, culture and remuneration team who spoke to The Australian Financial Review said they were regularly undermined by senior executives who did not believe in their mission.

The Parliament is calling for his head, with Centre Alliance patriots leading the charge:

Centre Alliance Senator Rex Patrick has called for the resignations of APRA chair Wayne Byres and his deputies after a review into the organisation found its leadership wanting.

The review of the Australian Prudential Regulation Authority (APRA), done for the government and led by former ACCC chief Graeme Samuel, found that “leadership, people and culture” were issues and that it “should address variation in leadership capability for all management levels”.

“If you look at the findings of the banking royal commission and this review you see that APRA has been asleep at the wheel. Leadership and culture have been identified as a problem and they are set at the very top,” Senator Patrick said.

“You can’t earn $886,000 [as Mr Byres does] and not be fully responsible for leadership, transparency and contestability,” Senator Patrick told The New Daily.

“It’s not proper for him to stay in that role. Ultimately, the buck must stop with someone.”

Even the business press has had enough, previously via Chanticleer:

This tight control of the dissemination of information and the strategic decision to avoid the nightly news sits oddly with the firm advice in the capability review for APRA to engage more deeply with the community.

But it was Byres’ response to the media questions which left Chanticleer in doubt about his willingness to fix all the weaknesses in the management and strategic priorities at APRA identified by the capability review.

The review panel chaired by Graeme Samuel and including Diane Smith-Gander and Grant Spencer must surely be disappointed with Byres’ response. But they have chosen to let the report stand for itself and will not be commenting publicly .

At The Australian Byers is now an object of exasperated ridicule:

In most lines of work, if you do a poor job you don’t get a pay rise­. You might even be laid off. Not in financial regulation La La Land, where poor performance comes with a five-year ­contract and a $17,000-a-year pay increase.

You might have thought a royal commission, a series of damning inquiries into the quality of the financial sector (it’s difficult to keep track) and now a highly critical capability review would have been enough for a round of applications late last year for the position of chairman of the Australian Prudential Regulation Authority.

Instead, Wayne Byres, in the job since 2014, was appointed in November for a further five years and, thanks to the Remuneration Tribunal, scored a pay bump to $886,770 a few weeks ago.

Not bad in the lead-up to a 146-page capability review that found APRA slow, opaque, inefficient, and in urgent need of a culture and leadership overhaul.

However technically competent and experienced Byres might be, it was a mistake to reappoint him last year. He would have found other important work.

And a fresh chairman from outside the financial regulation establishment could have set the regulator, one of the nation’s most important, on a new path. Byres is hardly going to be a ­critical reforming force of an ­organisation he’s been at since 1998.

This afternoon the credibility gap is on display again, as APRA deploys new pay caps, at Nine:

The prudential regulator is proposing to weaken the link between a bank’s financial performance and how much it pays its executives after the royal commission found that existing bonus structures contributed to poor treatment of customers.

The Australian Prudential Regulation Authority on Tuesday released a draft standard aimed at “clarifying and strengthening” remuneration requirements in APRA-regulated entities to reduce the likelihood of misconduct.

Prioritising financial performance over considerations such as conduct, culture and customer wellbeing was regularly cited at last year’s royal commission hearings as a factor in customers losing out financially in dealings with their lenders.

“In the financial sector, APRA has observed an over-emphasis on short-term financial performance and a lack of accountability when failures occur, especially among senior management,” APRA deputy chair John Lonsdale said.

What about failed regulators pulling massive salaries?

Wayne Byers must resign. He is an embarrassment to APRA. He is an embarrassment to the Treasurer. He is a risk to reform. He is a risk to Australia via the return of the mass mortgage fraud that he happily waved through in the last cycle.

Comments

  1. If this bubble blows again, Byers Lowe Sukkar Recessionberg should be criminally prosecuted and go to jail

    • The Traveling Wilbur

      Clearly Recessionberg isn’t experiencing any Byres’ remorse.

      Nor Byres himself. Clearly.

    • Don’t get me wrong as I agree with you sentiment, but your call is laughable. Australia is a backwater 3rd world country when it comes to laws that hold these people to account.

      It appears you can drive a fleet of haulpaks through our laws.

    • Not Jail, they need to be lynched in public for their crimes.
      After the lynching, string them up in Martin Place…

      • Maybe the Martin Place homeless in tents can come back and use their dead bodies as pinatas, think of all the money that will come out when they explode open after being savagely beaten with a baseball bat? Or maybe Cricket Bats are more Australian?

  2. Byers would be dumb to resign. They are going to have to pay him to go.
    Alex Malley of CPA got paid $5 million to go as a golden handshake – surely Byers is worth more?

  3. prudential regulation was separated from the reserve bank in order to create a smaller specialist regulator more easily captured by the banks. APRA was created to facilitate corruption and it is working in spades.

    Forget Wayne Buyers, it is APRA itself that must be killed and prudential regulation returned to the RBA.

      • The Traveling Wilbur

        Indeed. We wouldn’t want anything to get in the way of the RBA cutting rates and restoring manufacturing jobs.

        Mostly in Guandong. But restoring them nonetheless.

    • proofreadersMEMBER

      The RBA is not the solution – it is just another part of the problem.

      We need a toe-cutter from RBNZ.

  4. GunnamattaMEMBER

    They’ve all lived such lives of entitlement that really don’t know anything about public service at all. It’s all about drawing a preposterously large salary, which undermines the culture of public service in the first place, and then protecting it ahead of the public interest.

    You could say the same about virtually every SES level Public Servant, and the bulk of Executive levels too

    • The Traveling Wilbur

      The really, really, really special moment is when you realise that one or more of your aforementioned public servants are (or were) banking industry execs – and are now bringing their mates (from banking), with them.

  5. I almost feel sorry for Wayne.

    The way everyone is turning on him for just doing his job of facilitating a well regulated bubble.

    Not much gratitude from the lizards of the press even though they were fawning and sprinkling petals the entire time.

    6 months in Sweepers journalist re-education camp is required.

    Getting rid of Byers allows everyone to agree it was the man and not the mission.

    Anything to avoid talking about the model.

    • Jumping jack flash

      This!

      Classical scapegoating.

      For sure, with better regulation we probably would not have this enormous mess with no solution that we have now, but we also wouldn’t have all the instant multi-millionaires, stinking rich from a mountain or two of someone else’s debt running around living it up without a care in the world.

      Think of the poor retirees with no super!! Would we all have them eat cat food in retirement, huddled under crocheted blankets, their wispy white hair crackling with frost, because they can’t afford the electricity bill to run the heater?? Its just inhumane. Its not what Australia is about, mate. Throw them a bone, or a couple of million dollars of someone else’s debt.

      And think about the effect on the Rhine river cruises! Won’t somebody think of the Rhine river cruises!!!!

      This man worked a veritable miracle and he should be celebrated, not castrated.

      I’m sure 90% of people had no idea who this quiet genius was before the RC.