8 LISTENER OCTOBER 13 2018
BULLETIN FROM ABROAD
Mercifully, Hayne’s first report is
free of jargon and hedging. “Why
did it happen?” he wrote. “Too
often, the answer seems to be greed- the pursuit of short-term profit at
the expense of basic standards of
honesty. How else is charging con-
tinuing advice fees to the dead to be
explained?”
The banks, he said, ignored the
risks to their reputations, and when
shonky practices were exposed,
made apologies and promises to do
better – and did little else.
N
ew Zealand regulators appear
satisfied that what happened
in Australia has not been
replicated across the Tasman –
despite Australia’s four biggest banks
holding about 90% of deposits in
the New Zealand financial system.
“Why search for a problem yet to
be identified?” said New Zealand’s
Reserve Bank governor, Adrian Orr,
airily dismissing the Australian
inquiry in April. “I don’t see any
lack of confidence in banks in New
Zealand.” A week later, he asked
the banks to demonstrate how they
differed from their Australian
parents.
Neither Turnbull nor Mor-
rison saw any banking problem
in Australia – until a dogged
journalist and unflinching judge
showed where the banking regu-
lators either failed or were too
scared to look.
Certainly, the banks weren’t
going to tell them. And they sure
didn’t tell Orr’s banking watch-
dog counterparts in Australia. lF
or almost a year, Australians
have watched in bemusement,
drifting to disdain, as the line
of suits – not all male – lamely
excused their darker practices before
the derisive gaze of the judge heading
the country’s banking inquiry. It was
not a royal commission that former
Prime Minister Malcolm Turnbull and
his recent successor, Scott Morrison,
ever wanted. While he was Treasurer,
Morrison described the pressure for
an inquiry as a populist whinge that
threatened to undermine the public
standing of the big banks.
They rubbished calls for the investi-
gation until pressure from MPs forced
their hand late last year as a clutch of
journalists, led by the Sydney Morning
Herald’s Adele Ferguson, kept expos-
ing how the banks’ financial
advisers were vaporising the
life savings of the vulnerable.
The owlish, slightly built
former High Court judge
Kenneth Hayne, picked to
lead the inquiry, might have
been expected to oversee a
colourless, if not odourless,
probe. He did the opposite.
The lawyers and investigators
Hayne assembled gained the
ammunition to blowtorch
bankers, with results includ-
ing one collapsing in the
witness box, others instantly
destroying their careers andAustralia’s banking
inquiry reveals
a culture that
should put New
Zealanders on alert.
Coming the raw prawn
“Greed. How
else is charging
continuing
advice fees to
the dead to be
explained?”
New Zealander Bernard Lagan is
the Australian correspondent for theAL ROSS/THE CARTOON BANK Times, London.
some becoming so snared in self-serving corporate
obfuscation that wells of derision have bubbled up
from the audiences.
When AMP’s hapless head of financial advice was
asked why the policy to charge clients fees for no
services was described by AMP as a mistake – when
it wasn’t – he replied, “I think its shows a culture
that is not as robust as it should be.”
So vast is the bankers’ habit of gouging fees for
services customers never get that AMP and the
four biggest banks – ANZ, CBA, NAB and Westpac- have agreed to pay 306,000 customers combined
compensation of more than $216 million.
Among the admissions from bankers that have
rocked the royal commission’s public hearings:
A Commonwealth Bank financial advisory busi-
ness continued to charge fees to customers they
knew had died, including one instance where fees
were charged for more than a decade.
The same bank said it would boost 30-year-old
roofer David Harris’ credit-card limit by thousands
of dollars, adding to his existing debt of more
than $27,000, after he told the bank he was a
problem gambler.
Banks sold credit-card payment protection poli-
cies to 64,000 people, many of them jobless, who
could not claim on the product.
National Australia Bank staff approved loans they
knew were based on fake documents in order to
“smash targets” and score bonuses.
BERNARD
LAGAN
IN SYDNEY