Banking Royal Commission

A disgraceful waste of money that should eventually find that private business has a profit motive and deadbeats shouldn’t get loaned money. But I suspect not.

In the meantime here is some stuff I have written on banking:

Submission to the Senate inquiry into Competition within the Australian Banking Sector.

Bankers-and-Scapegoats.

Imprudent lending and the Sub-prime crisis: An Austrian School Perspective.

Informing depositors: A proposed reform of the Australian banking sector.

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87 Responses to Banking Royal Commission

  1. Bruce of Newcastle

    Banks have had this problem for a while now:

    published in The Saturday Evening Post in January 1951:

    Someone once asked Slick Willie Sutton, the bank robber, why he robbed banks.
    Sutton looked a little surprised
    “I rob banks because that’s where the money is,” he said

    I wonder if the RC will ask Slick Mal what the bank tax is for?

  2. marcus classis

    So many backflips from Turnbull!

  3. H B Bear

    The PeanutHead government you have when you don’t have a PeanutHead government.

  4. H B Bear

    I wonder which side of the chamber Lord Waffleworth will sit when Parliament resumes on Monday?

  5. Tim Neilson

    Baldrick
    #2571356, posted on November 30, 2017 at 6:04 pm

    Thanks Baldrick.

    It looks to me like union dominated industry super funds technically fall within the terms of reference.

    However, the Commission will have power to narrow its own remit.

    Is Michael Trumble showing a microgram of political nous, or will this opportunity be scuppered by appointing a rusted on leftie who will excuse the maaaates from their rightful place under the spotlight?

  6. Tel

    Government is in a mutual relationship with the bankers and both sides know the deal. This is mostly for show and perhaps something to renegotiate the split.

  7. Charlie

    Finally Trumble does something right. Too bad he waited so long that banks have had time to erase all incriminating evidence.

  8. Bruce of Newcastle

    Finally Trumble does something right. Too bad he waited so long that banks have had time to erase all incriminating evidence.

    Which they’ve hidden from the anal probers of APRA, ASIC, the ASX, the MSM, the Labor Party, the Greens and literally dozens of banking inquiries for years and years and years eh?

    Meanwhile APRA today wants them to spend more money on non-existent global warming. Sheesh.

  9. Infidel Tiger 2.0 (Premium Content Subscribers Only)

    $75,000,000 show trial which shareholders and taxpayers get the bill for.

  10. JC

    You know what, the banks deserve this treatment in a political sense. Every single one of these CEO’s and management culture has basically sucked leftwing dick for too long. This is a good comeuppance at a certain level.

  11. Stimpson J. Cat

    Let’s try and stay positive gang.
    It’s cheaper than the NBN!

  12. JC

    While on the subject of the banks. They seemed to have recovered from their 2% losses except CBA. Does anyone know why they’re copping it? Are they more exposed to a woyal commission?

  13. Bruce of Newcastle

    JC – Reuters thinks it’s because they had the most recent scandal, whatever that was.

  14. mareeS

    Our daughter applied last week to her financial institutution for a .$7000 loan, wishing to establish a credit record.

    The institution stipulated the spouse and I must go guarantors.

    Now, we have $8m-odd assets and about $100k liabilities, and we had to sit through 1hr45mins of grilling before we told the person that their organisation could basically go and get effed, as our kids don’t really need to borrow, and we can underwrite them.

    Amazing how quickly the loans manager got back to us. We said something along the lines of “get stuffed , we are self-funding her so she is not subjected to this. You have lost a loan.”

  15. stackja

    Storm brewing? ANZ foreclosed why?

  16. DM of WA

    Banking Royal Commission
    Posted on 5:44 pm, November 30, 2017 by Sinclair Davidson

    A disgraceful waste of money that should eventually find that private business has a profit motive and deadbeats shouldn’t get loaned money. But I suspect not.

    Wrong. Banks in Australia are not private businesses in any meaningful sense. Banking is the most privileged, highly protected, state-controlled industry it is possible to imagine – it is run more as a quasi-autonomous arm of the state. Banks could more correctly be described as state-dominated rather than state-owned but nothing like private businesses and that is the problem: state-like power to make their own rules and freedom from accountability to the taxpayers who pay for their activities. And taxpayers do pay for it in the same way we paid for the old Australian motor vehicle industry. There is an enormous industry subsidy and no competition allowed let alone encouraged. And the big political parties are perfectly happy with the status quo. Just look at how many politicians move effortlessly into plum banking roles when they exit parliament!

    The only saving grace is that the banking industry is run by moderately competent people with a strong profit incentive rather than incompetent unaccountable bureaucrats.

  17. Zulu Kilo Two Alpha

    JC – Reuters thinks it’s because they had the most recent scandal, whatever that was.

    IIRC, the bank was hit with a multi million dollar class action, alleging that the bank had breached the money laundering laws.

  18. JC

    Oh yea, thanks guys. Forgot about that. You know what though, I reckon CBA really didn’t do much wrong with that. They followed the letter of the law. They didn’t avoid making disclosure, but they weren’t as tight like the other little pansy banks and would report qt the high echelon closer to the limit. CBA thought they weren’t a payment policeman. Yuge mistake.

    If CBA didn’t see the money laundering, where the fuck were those clowns at Oztrack who are supposed to be wading through the international payments system. Why isn’t there a woyal commission on those useless tax eating clowns.

  19. JC

    IIRC, the bank was hit with a multi million dollar class action, alleging that the bank had breached the money laundering laws.

    Who’s filing a class action and on what basis?

  20. JC

    What a scam? What a fucking scam.

    The class action was filed on behalf of investors who suffered losses due to the share price fall following the institution of legal proceedings by AUSTRAC against CBA.

    Everyone owing the stock suffered losses. So one bunch of shareholders joining the lawsuit are trying to steal money from the ones that aren’t? How the fuck does that work? What if 100% of the shareholder joined the suit?

    What a bunch of scam artists Maurice Blackburn are.

  21. hzhousewife

    AUSTRAC failed mightily, not sure who they answer to structurally.

  22. hzhousewife

    Maurice Blackburn are on a roll because Slugs and Grubs are stymied atm. Hilarious. I don’t know how corporation lawyers can lie straight in bed.

  23. Tel

    … we had to sit through 1hr45mins of grilling before we told the person that their organisation could basically go and get effed …

    Yeah, it’s a very fashion conscious industry. When I was young and not terribly well off and arguably a lot more foolish than I am now, banks were constantly chasing me to take money. I even had fresh clean credit cards, in my name, dumped on my front doorstep (absolutely not a moment’s thought to security) all unsolicited from people who somehow got my details.

    Nowadays they don’t do that shit anymore, they pretend to be all proper about it (while no doubt doing different shit).

    Banks in Australia are not private businesses in any meaningful sense. Banking is the most privileged, highly protected, state-controlled industry it is possible to imagine – it is run more as a quasi-autonomous arm of the state. Banks could more correctly be described as state-dominated rather than state-owned but nothing like private businesses and that is the problem: state-like power to make their own rules and freedom from accountability to the taxpayers who pay for their activities.

    Yes totally, and that’s why Heaven and Earth will move against Bitcoin if regular Joe Schmuck ever starts using it on a regular basis. That’s what government protection means… being safe from the bad guys.

    It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.

    The important difference between an Australian bank and a butcher being that a collective advantage exists: banks support government spending, monitoring and taxation, while government, in return, supports banks by offering protection.

  24. JC

    If the judge doesn’t throw out this lawsuit and force Maurice Blackburn to eat shit, our judicial system is totally screwed.

    You shouldn’t and you can’t have one bunch of shareholders enrich themselves from the others as a result of a lawsuit such as this one.

    90% of the problem is the useless fee-raking board. They never asked the government why isn’t Austrac the ultimate culprit here rather than CBA. They never defended the bank.They rolled over like the cowards they are in every major Australian company,

    I guessed – even before I looked they would have at least three women on the board.

    Get a load of the resumes.

    Wendy Stops
    Independent Non-Executive Director

    Wendy has been a Director since March 2015.

    She is a member of the Audit Committee and the Remuneration Committee.

    Wendy was Senior Managing Director, Technology – Asia Pacific for Accenture Limited from 2012 until June 2014. Her career at Accenture spanned some 32 years in which she held various senior positions, including Global Managing Director, Technology Quality & Risk Management, Global Managing Director, Outsourcing Quality & Risk Management and Director of Operations, Asia Pacific. She also served on Accenture’s Global Leadership Council from 2008 until her retirement.

    Other Directorships and Interests: Fitted For Work Ltd, University of Melbourne (Council Member) and Chief Executive Women (Member), serving on the Scholarships and Marketing & Communications Committees.

    Qualifications: BAppSc (Information Technology), GAICD.

    A nothing resume other than she’s a woman.

    Mary Padbury
    Independent Non-Executive Director

    Mary has been a Director since June 2016.

    She is a member of the Remuneration Committee and the Nominations Committee.

    Mary is a pre-eminent intellectual property lawyer with over 30 years’ experience. She is a Partner and the Vice Chairman of Ashurst, having been the Chairman of Ashurst Australia for eight years prior to the firm’s full merger with Ashurst LLP in 2013.

    Mary spent a number of years in the UK with boutique firm, Bristows, and as resident partner of Ashurst Australia. She has undertaken intellectual property work for Australian and multinational corporations in a range of technology areas and has extensive international, legal and governance experience.

    Other Directorships and Interests: Ashurst (Vice Chairman), Trans-Tasman IP Attorneys Board (Chairman), The Macfarlane Burnet Institute for Medical Research and Public Health Ltd, Chief Executive Women (Member) and Victorian Legal Admissions Board (Member).

    Qualifications: BA LLB (Hons) (Melb), GAICD.

    Lawyer.

    Catherine Livingstone AO
    Chairman

    Catherine has been a Director since March 2016 and was appointed Chairman on 1 January 2017.

    Catherine is Chairman of the Nominations Committee, a member of the Risk Committee, the Audit Committee and the Remuneration Committee.

    She is a former Chairman of Telstra and of the CSIRO, and was Managing Director and Chief Executive Officer of Cochlear Limited. She has served on the Boards of Macquarie Group Limited, Goodman Fielder Limited and Rural Press Limited and has contributed to the work of the Innovation and Productivity Council for the New South Wales Government. She is a former President of the Business Council of Australia. In 2008, Catherine was awarded Officer of the Order of Australia.

    Other Directorships and Interests: WorleyParsons Ltd, Saluda Medical Pty Ltd, The Australian Ballet, University of Technology Sydney (Chancellor) and Australian Museum Trust (President).

    Qualifications: BA (Accounting) (Hons), FCA, FTSE, FAICD, FAA.

    Ms Livingstone is a resident of New South Wales. Age 62.

    Professional fee raker.

  25. JC

    hzhousewife
    #2571427, posted on November 30, 2017 at 7:10 pm

    AUSTRAC failed mightily, not sure who they answer to structurally.

    It’s astonishing. no? They came out smelling like roses because they dobbed in CBA when it’s ultimately their responsibility.

  26. candy

    This RC seems very broad now, not just looking at some bank practices in regard to regular consumers.
    I wonder why ASIC and the inquiry cannot fulfill the same purpose though.

    I’m not a bank basher by any stretch. Their ATM withdrawal fees always irked me, though.

    The banks withstood the GFC, so I don’t think they are evil. In fact, they must be run very very well. I think we’re pretty lucky really.

  27. JC

    The banks withstood the GFC,

    They didn’t. It’s a yuge myth. All of them with the possible exception of Westpac were at the RBA window borrowing loads of money because they were fucked.

    The offshore commercial paper market essentially closed down resulting in a big gap in their borrowing needs. If the RBA didn’t act quickly and stabilize the system they were gonsky. I made money on the decent short in Bank of Queensland.

  28. candy

    That goes against just about anything I’ve read, JC. In fact, the Australian banks stand out in the world for their ability to weather the GFC relatively unscathed, plus some good handling by the Federal government and the RBA.

  29. entropy

    I doubt their would be much new examples in submissions into rural lending. Just go and look at any of the submissions for two recent senate inquiries or the Qld taskforce, all done in the last two years and that would be about the lot. It will be the same people, who collectively think that banks should never foreclose to protect their investment because, well the because is never clear, but is probably along the lines of “I kept farming until all my money had gone, and now I want to keep farming until all the bank’s money is gone.”

  30. entropy

    candy
    #2571459, posted on November 30, 2017 at 7:37 pm
    That goes against just about anything I’ve read, JC. In fact, the Australian banks stand out in the world for their ability to weather the GFC relatively unscathed, plus some good handling by the Federal government and the RBA.

    Candy! You listened to a Wayne Swan?

  31. JC

    That goes against just about anything I’ve read, JC.

    Well what you read was wrong. All the banks .. I don’t think there was one exception.. were forced to go to the RBA window and they subsequently raised equity to bolster their balance sheets.

    Without the RBA they were done.

  32. Combine Dave

    Ironically if you hate banks getting more banks in is the way to stuff the big 4.

  33. C.L.

    The communist National Party wants to more or less ban foreclosures.
    Because Aussie Man On The Land.

  34. JC

    The other thing the RBA did, I recall from memory, was to guarantee the banks wholesale borrowing during the crisis.

    To repeat, the banks were goners.

    The communist National Party wants to more or less ban foreclosures.
    Because Aussie Man On The Land.

    Can you imagine the bawling. Just imagine.

  35. JohnA

    Stimpson J. Cat #2571388, posted on November 30, 2017, at 6:42 pm

    Let’s try and stay positive gang.
    It’s cheaper than the NBN!

    But they haven’t convened yet! Give them a chance to show their mettle.

    I would place a bet that the lawyers can outspend the engineers.

  36. Remember when Sinclair was telling us all how good it was that Turnbull had taken over from that conservative Neanderthal Abbott?

    I remember.

  37. classical_hero

    Luke, Pepperidge Farm remembers. He has no political nous.

  38. Tel

    In fact, the Australian banks stand out in the world for their ability to weather the GFC relatively unscathed, plus some good handling by the Federal government and the RBA.

    You forgot the bit where we run up $40 billion in public debt every year.

  39. JC

    Actually Luke, your comments are fake news.

    Sinclair didn’t say that at all. Sinc said that it was justified Abbott should get the boot for a number of good reasons. He said that Turnbull had the potential of being a great PM. In a nutshell, that’s what he said. He never made a prediction that the trurbull would be great.

    Leave the fake news bullshit to the left.

  40. Bruce of Newcastle

    All the banks .. I don’t think there was one exception.. were forced to go to the RBA window and they subsequently raised equity to bolster their balance sheets.

    Without the RBA they were done.

    JC – They were four of the top ten or fifteen banks in the world rated AA or AA+. That says the problem wasn’t the banks it was the country.

    The RBA made a motza charging them for the privilege (70 bp iirc), so it didn’t cost the government a brass razoo.

  41. Waz

    A finely crafted 2 line comment Sinc…..and one which I totally agree with. Common sense has now become rare sense.

  42. John Bayley

    They were four of the top ten or fifteen banks in the world rated AA or AA+

    You know, so was AIG. Those ratings meant sh*t.
    JC is entirely correct – not only were our banks effectively insolvent, it took the Rudd government’s unconditional guarantee – which was provided essentially for free to the banksters (later estimated to be valued at several hundred million dollars) – to save them from falling over.
    The reason for that outcome was basically due to timing mismatch: The banks were borrowing short-term on the cheap overseas markets, to fund long-term loans with juicy profit margins.
    When the funding abruptly dried out, they could not rollover their loans.
    Remember Centro Properties? — That was exactly the same, but unlike the banks, Centro did not have friends in the right places.

  43. Tim Neilson

    JC – They were four of the top ten or fifteen banks in the world rated AA or AA+. That says the problem wasn’t the banks it was the country.

    The RBA made a motza charging them for the privilege (70 bp iirc), so it didn’t cost the government a brass razoo.

    Correct, in fact the government made money at shareholders’ and customers’ expense.

    The banks hadn’t even asked them to do it. Goose Swansteen just did it in a fit of panic, then decreed that the banks would have to pay a fee for a service that they had never asked for. (Well, what’s government for, I suppose.)

  44. JC

    Bruce

    There are two ways banks can fail. They can fail on the liability side, which essentially means they can’t borrow enough money to match the asset side of the balance sheet.

    They can fail on the asset side where the bank loans have turned to shit.

    You’ve got look at what’s driving what. Our bank basically failed because of their liability management.

  45. JC

    Tim

    Shane Wand would have been guided by the RBA over this.

  46. Tim Neilson

    The reason for that outcome was basically due to timing mismatch: The banks were borrowing short-term on the cheap overseas markets, to fund long-term loans with juicy profit margins.

    That’s essentially what banking is about. Some punters deposit at call, and other punters borrow for 25 year housing loans. It’s the reverse of normal financial sense which is why there are prudential requirements to ensure they stay solvent.
    And our banks did. And it was nothing to do with Goose Swansteen’s mythical financial genius.

  47. Tim Neilson

    Shane Wand would have been guided by the RBA over this.

    Maybe so, but that doesn’t make it sensible.

  48. Neil

    He said that Turnbull had the potential of being a great PM

    Only a fool would say that

  49. Tim Neilson

    He said that Turnbull had the potential of being a great PM

    It’s a good thing for him that he didn’t open a book on it.

  50. Makka

    What you didn’t say JC is that like Sinc, you too backed Turdball. You were wildly in favour of him , if I recall. More fake news from you.

  51. JC

    STFU Makka, you misery guts.

    Abbott lied to us about a number of things and he needed to be punished severely. Everything about Turdbull was based on hope.

  52. Neil

    Abbott lied to us about a number of things and he needed to be punished severely.

    What were these lies? I know he tried to cut sending in the 2014 budget but the Senate blocked it. In fact the ALP has been playing Dr No in Opposition

  53. Bruce of Newcastle

    There are two ways banks can fail. They can fail on the liability side, which essentially means they can’t borrow enough money to match the asset side of the balance sheet.

    JC – If there is no money to be borrowed at any price there’s nothing they can do about it. That then is a system failing, and individual companies don’t run the system.

    About half their short term borrowings was on the international money markets since there isn’t enough to be had locally. That is because government settings fail to increase the savings rate. Tax on savings is the sort of thing that does it. Low local interest rates and high relative inflation rate is another reason.

    So when the money markets got scared and closed up shop overnight the local banks had no local liquidity to draw upon. None. Except the RBA. That is what the RBA is for, amongst other things.

    Blaming the local banks for a money market panic caused by Lehman Bros and Barack Obama’s pet money pots Fannie and Freddie, Ninja loans in Chicago and other rorts, is very unfair to four AA rated banks with some of the highest tier 1 capitals in the first world at the time.

    At present they have tier 1 capitals in excess of likely Basel IV levels, which are still only a twinkle in the eye of the ECB. I don’t even think Basel IV will happen because the Fed and the ECB especially won’t want to knobble their shaky banking systems. It is a tell that our lot are so rudely healthy that no one even winces at tier 1’s above 10% here – and tier 1 of 10% under APRA rules is something like 13% under Basel III rules as I recall.

    This is from memory, if anything about the respective rules is wrong, sorry.

  54. Snoopy

    Those accusing Abbott of lying are open borders loons. Come on down boys!

  55. John Constantine

    RICO the banking system right now.

    Crony socialism has seen the banks bribe their pet pollies to ruin Australia with the population importation rentherd, voteherds, Ponzi scheme.

    Too big to fail means must be broken up for competition.

  56. Andre S

    The banks ought to be investigated for collusion with other banks and the government to earn profits in a manner that does not respect the money of its investors and depositors, that is bastardise people money in inappropriate ways, that is unconstitutional.

    The irony is the government foots the $75m bill, say $10m or so will go to advisers and consultants, the rest will buy off the legal advise and representation.

  57. AUSTRAC failed mightily, not sure who they answer to structurally.

    AUSTRAC emailed me quite recently to say they’re going into suspension for 9 months and to not bother preparing my next report, as they won’t be recording anything during this 9 months.
    They finished off, of course, with a brutally nasty crack that even though they’re skipping a report, they’ll be back with a vengeance after that, & I had better have all future reporting done on time or else I’ll go to prison, blah blah blah,

  58. A disgraceful waste of money that should eventually find that private business has a profit motive and deadbeats shouldn’t get loaned money. But I suspect not.

    Wrong!
    What you meant to say was:

    A disgraceful waste of money that should find banks have a licence which comes with an obligation to fulfil the conditions of that licence. Profit motive is to be incidental to fulfilling licence commitments, and at no time is profit to be the primary motive.
    All actions must be for public benefit, and with no negative impact upon any public. This public impact & public benefit to be supported by pre-written registered documents that had better be adhered to.
    If deadbeats are loaned money, it is the fault of the stupid banker for loaning it to them. (This to also be in the pre-written public benefit statement, or perhaps the public impact statement.

  59. Yes it is a disgrace, but little will change

  60. Robber Baron

    Despite enormous state regulation, banks still need a royal commission. More state regulation according to the state will be necessary. Isn’t free market Australia grand?

  61. Despite enormous state regulation, banks still need a royal commission. More state regulation according to the state will be necessary. Isn’t free market Australia grand?

    Robber Baron: I think I’m the only person I know who is against a Banking Royal Commission. (Excepting actual bankers, of course).
    Even some people who were hesitant, or even were against it, are now forwarding me petitions to sign & the like (although petitions not necessary now).

    There’s been people in favour of the Royal Commission since forever (this may have even included me once, way back when) but there’s always been people against it, or hesitant.
    The scale of the recent pile-on has surprised me.

  62. JC

    Robber Baron

    Look closely to what the trannie is suggesting in his earlier stupid comment. What he’s after is socialist banking and he’s after cheap loans.

  63. Actually dickhead, I copied out the terms of my liquor licence.
    Changing one word Liquor into Bank.
    You will now explain why a banking licence is different to a liquor licence, and you will put forward a case why a banking licence holder should receive special dispensation.

    …..GO!

  64. JC

    Fuckwit, why would I support the conditions stipulated on a liquor license. Fuck me you’re useless.

  65. I’ll take that, rightly, as conceding you have no idea how to make an argument in favour of banks being a special case.

    Thank you, and goodnight.

  66. JC

    You don’t take anything, dickhead except carrying my bags .

    Go clean the bar.

  67. OneWorldGovernment

    I want a Royal Commission into The Department of Treasury, The Australian Taxation Department, The Australian Competition & Consumer Commission and the fuckheads that decide who gets the pay rises in gubmint.

    And chuck in the useless Prime Ministers Department.

    Can any of the pricks justify their position let alone their pay?

  68. Charlie

    Isn’t free market Australia grand?

    Australia does not have a free market and has never had a free market. If you want a free market then move to the Congo

  69. The need for a Royal Commission would indicate that the regulatory authorities, such as AUSTRAC, ASIC, etc, are not doing their jobs properly, so why are they needed? Get rid of all these apparently incompetent regulators, with their attendant bureaucrats and save millions!

  70. Rabz

    When I was young and not terribly well off and arguably a lot more foolish than I am now, banks were constantly chasing me to take money.

    I was offered a $75,000 line of credit by a foreign bank that was entering the Aussie market back when I was a 20 year old full time uni student.

    Thank bloody goodness I didn’t take them up on it. It would have been spent on women, fast cars, booze and drugs and the rested tragically wasted.

  71. EvilElvis

    You know what, the banks deserve this treatment in a political sense. Every single one of these CEO’s and management culture has basically sucked leftwing dick for too long. This is a good comeuppance at a certain level.

    Can only agree. As the virtue signalling on homos, renewable energy and whatever lefty cause of the week has increased the level of service and competence has plummeted. Just another fucked, gender quota driven, state ruled industry

  72. cohenite

    Meanwhile APRA today wants them to spend more money on non-existent global warming. Sheesh.

    Key bureaucrats in key positions are all alarmism needs to continue. The Industry Super funds, largely run by the CFMEU, are one of the key investors in renewables for which they get government LSEC worth up to 2.25 billion PA in return. I’m sure this scam churn will be investigated.

  73. John Constantine

    In return for their banks supporting the leftist cause of the week, like an afl with a mortgage arm, crony socialism looks after their too big to fail maaaaates.

    Crony bank socialism finds it easier to be handed new client herds of imported welfare grazers needing bank accounts to be paid into.

    Crony bank socialism crows when it writes ten million dollars worth of mortgage business from one Ponzi scheme mansion instead of a hundred working man dwellings.

    Crony bank socialism needs Big Australia, needs to replace deplorable Australians with compliant red tapeherds.

    Crony socialism needs banks big enough to afford the massive cultural corporate bribes the banks hand out, entertainment tents at the right events, tickets to hobnob with flogknobs and social justice warriors.

    RICO the corrupt bribe culture that the banks use to kill off old Australia.

  74. If CBA didn’t see the money laundering, where the fuck were those clowns at Oztrack who are supposed to be wading through the international payments system. Why isn’t there a woyal commission on those useless tax eating clowns.

    Don’t get me started on Austrac, JC.

    Too late, you already have.

    Some of their division heads are so up themselves that mere mortals were not allowed to speak to them. I’m think of one rather ugly woman in particular.

    Worse, another division head forbade staff from not only speaking about a newly ex-employee, but even asking why. I kid you not.

    Furthermore, when it became apparent that I was being paid half than a replacement doing half what I did, I suspected something shonky behind the scenes. They wouldn’t even let me utter the subject due to “privacy”. I suspected people were skimming the difference between agent and employer, with me and another woman struggling to feed our families as a result. I always suspected the agency with a reputation for that, however the reluctance to hear me out made me very suspicious.

    Also, those that are sanctimonious usually have something to hide, so certain execs I believed to be untrustworthy.

    That said, you’re right. They have analysts who are supposed to reveal suspicious transactions based on reams of data provided by banks. They make a big deal out of catching one person sending money to terrorists to justify the exorbitant costs of their existence. They can’t easily fob that off to the banks, but they’ll certainly try.

    However, apparently they did ask CBA to explain themselves, with little or no response.

    I’d say we’ll see, but we probably won’t.

  75. John Constantine

    Their royal commission wasn’t a complete waste of money.

    It got bribeman dastardly off the front pages.

    It also buried peoples interest in how communist China has bribed Australian quisling politicals to deindustrialise Australia and import all vital economic requirements from monopoly cartels controlled by the Chinese communist party.

    What a brilliant idea Julie Bishop.

  76. Tim Neilson

    You will now explain why a banking licence is different to a liquor licence, and you will put forward a case why a banking licence holder should receive special dispensation.

    I’d argue for the converse, that liquor licensee are ridiculously over-regulated.

  77. I’d argue for the converse, that liquor licensee are ridiculously over-regulated.

    Quite so, & over-regulated to the nth degree.
    I carefully made no mention of the regulation of liquor licences. Only of the purpose of a liquor licence.
    Many who bat for the banks overlook the reason for a banking licence. Most pro-bank arguments deftly avoid that issue altogether.

    There is a reason for that.

    However there is no need for a Royal Commission. The purpose of a banking licence can be addressed in a 3-line email.

  78. Ralph

    Sinclair says

    A disgraceful waste of money that should eventually find that private business has a profit motive and deadbeats shouldn’t get loaned money. But I suspect not.

    Only problem with that is that the banks are not really private businesses. They receive explicit and implicit government support and cannot fail. The can do what they want and the taxpayer foots the bill if it all goes wrong. It distorts their incentives and allows them to take risks in the knowledge that the government has got their back. That’s a pretty good deal that very few other ‘private’ businesses benefit from. In return, the banks have an obligation to not screw the very taxpayers that underwrite their privileged position. In recent times, the banks have taken their government-backed status a little too lightly and they need to be given a reminder that they operate under different rules to the vast majority of ‘private’ businesses, which run the risk of bankruptcy if they make bad decisions.

  79. Bruce of Newcastle

    Ralph – I notice you don’t mention the shareholders at all. They might be interested in those risks being taken, and the bad decisions, seeing that if the bank becomes insolvent it may technically survive but the shareholders will be wiped out. That is why the banks have boards elected by the same shareholders, and those boards can hire and fire the CEO until they get one who does actually do the will of the owners of the company. So your comment that they are not really private businesses is rubbish.

    Noteworthy that the banks which have most recently failed in Australia have been government owned, such as the Banks of SA and Victoria. Both were creatures of the ALP.

  80. Ralph

    John Constantine

    Crony socialism has seen the banks bribe their pet pollies to ruin Australia with the population importation rentherd, voteherds, Ponzi scheme.

    Too big to fail means must be broken up for competition.

    Too right. The big 4 banks (and in reality the whole freakin banking system) have the politicians in their pockets. Some politicians know just how fragile the whole system is and that it can all be brought crumbling down if the average punter receives just a bit of education about the house of cards that we call the Australian financial system. Therefore, government politicians generally avoid any criticism of the financial system because they know that it’s a confidence trick that needs to be handled with kid gloves.

    Opposition parties can be a bit more cavalier, but that all changes when they get into government because the regulators remind them just how fragile it all is and how they should just shut the f— up. Don’t spook the horses, we need to ensure that the public has confidence in the financial system or we’re all fcked.

    The banks know that they benefit from practically unlimited government support and take the average punter for a ride every time, knowing that the government (until now) will fall in line behind the banks. Until the big banks know that they will face consequences for their actions, nothing will change. A royal commission may just have the effect of changing that culture.

  81. Ralph

    Bruce – I’m not sure that shareholders would get wiped out in the event of a bank failure. That’s a hell of a lot of superannuation funds and mum & dad shareholders that would lose a lot of money if that happened. And all of those shareholders vote. No political party is going to want to kiss goodbye to hundreds of thousands (or even millions) of votes because they allowed a bank to go under. If a bank is looking like it’s really in danger, the government will step in with a full bailout. No questions asked. The banks are private companies, underwritten by the taxpayer. That’s just how it is in reality.

  82. Ralph

    I meant not sure that shareholders wouldn’t get wiped out.

  83. Bruce of Newcastle

    Ralph – Of course the shareholders would be wiped out. The alternative is the politicians would have to bail out the shareholders, and the bank. That would immediately cause them to lose the next election. You are correct that the banks are on the nose – so being seen to bail out them or their shareholders is political poison of the first order.

    The insolvent banks in the EU, particularly Greece, Cyprus and Spain, have caused the ECB to evolve the “bail in” tactic. If you read about “bailing in” you will see just how desperate pollies are to not have to bail out a bank with taxpayer funds. Bailing in is basically stealing the deposits held by the bank and using them to bail the bank out. The depositors, who have no guilt other than choosing the wrong bank to hold their savings, are pillaged.

    I actually think the problem is that pollies are so terrified about banks failing, and are so aware that voters hate them, that it isn’t the banks running the pollies, it’s the pollies standing over the banks. So every excuse they get they make them do politically stupid stuff – like not lending to coal companies, Israel, ebil oil companies, spending oodles of money on things Green and lefty just so the pollies can be seen to be beating the banks with a big stick. I mentioned upthread APRA’s latest stupid idea of monstering the banks to spend more on non-existent CAGW. That is completely classic.

  84. I mentioned upthread APRA’s latest stupid idea of monstering the banks to spend more on non-existent CAGW. That is completely classic.

    It is first class. Deserves a thread of its own.

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