APRA wet lettuce wilts on banker pay

Because the Australian banks are in the process of being nationalised via government guarantees and the RBA TFF, you’d be right to expect that banker bonuses will be slashed as well to avoid moral hazard. You’d be wrong. Via AFR:

The prudential regulator has generously watered down a planned overhaul of banker pay and bonuses, back flipping over a proposal it had strongly defended multiple times in the face of industry resistance and which was endorsed by royal commissioner Kenneth Hayne.

The Australian Prudential Regulation Authority on Thursday said it would be ditching its plan to set limits on the use of financial metrics in determining banker pay, with the regulator proposing a cap of 50 per cent.

Rather, major institutions will now be required to assign an undefined “material weight” to non-financial measures in variable remuneration scorecards, following intense lobbying of the regulator from the financial sector.

So, Joe Public is to be reamed behind the APRA smokescreen once more for no greater crime than being too generous to bankers.

Almost as reamed is the Aussie bank shareholder who perhaps expects a little more for his investment. After all, as the banks are nationalised and their margins are crushed by zero and then negative interest rates, he might expect that remuneration would reflect the situation in which bankers have trashed the financial system and the risk-free rate of capitalism.

But, alas both taxpayer and shareholder are to be disappointed. For, as the banker kills the bank in the last desperate days of his personal mission to arbitrage all that is good in this world, he will fill his boots with personal remuneration even as the system that supports him sinks.

Such is the unfettered greed that the Hayne-chastened APRA endorses in the name of “keeping our economy strong”.

Of course, we all know the real truth of it, don’t we? APRA’s employees are engaged in the same control fraud as the banks, just waiting to be picked off by a hungry recruiter so that they too can carve off their slice of society and stuff it down hypocritical gullets.

Great work if you can get it.

Houses and Holes
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  1. F$%k yes, this is where the anger on this site needs to be channeled, the system!! And the fuc&ing “principles based” regulation that these wan&ers pull every time to enable the siphoning of wealth.
    For so long this place (MB) and hnh have been where I come to know I’m not alone in witnessing the sick st!tfuc&ery that happens in this country. Maintain the rage lads, avoid the partisan sh!t that’s tempting, because you are better than that and both fuc&ing side are as bad as each other at pulling this [email protected] Keep up the good work

    • I’m mad as hell and not going to take it any more. The rampant shitfuckery going on in this cuntry has gone too far. The place is cooked, just so corrupt, venal and stupid it does my head in. I don’t need to be this depressed. Decided this week with the wife we’ll pull up stumps and emigrate away from the EZFKA banana republic.

  2. Display NameMEMBER

    Might have been on this site that I saw a breakdown of the pay bands that execs from APRA fall into. There were over 20 if I recall correctly on over 300k. For an organisation that adds fcuk all value to the county, that’s a lot of wasted space

  3. Display NameMEMBER

    And then there is the 1.5M on exec “coaching”. Not sure what service this is a euphemism for these days

  4. pfh007.comMEMBER

    “..Because the Australian banks are in the process of being nationalised via government guarantees and the RBA TFF..”

    Sweeper will be most excited by that news!

    Though I doubt Sweeper would believe for a moment that nationalisation of the private banks is what anyone at RBA, APRA or Treasury have in mind.

    If they were really serious about lancing the private bank boil on the economy they would be moving to end the private bank monopoly on trading electronic central bank liabilities with some like MyRBA or a CBDC and the RBA has ruled that out.


    • Refer to the Banker’s intellectual fountain head:

      “At the same time, a CBDC should by no means displace the private sector. One aspect – discussed at length elsewhere (e.g. Brunnermeier and Niepelt 2019, Fernández-Villaverde et al. 2020)3 The economic design of a CBDC should not lead to a massive reallocation of funds away from commercial banks and to the central bank. “


      The book ends on discussion in regards to CBDC have already been put in place.