Adam Creighton is generally on the money, so to speak. But some of his latest contributions are almost worthy of the Whish-Wilson-aWard. Consider Adam’s effort from this past weekend:
Even the title confuses how Australian (financial services) regulators work.
Wanna see a tough stand? Ask a small to medium financial services operator who faces the full weight of ASIC, essentially blown out of the water not necessarily because they have done wrong, but because they can’t compete with the resources.
Imagine also, a 23 year old university graduate with no prior work experience deciding whether someone, using their own money to run a business has the qualifications and experience to actually run that business.
The way ASIC deals with smaller operators would make Kafka proud.
And the result …. there are no longer small operators but only large operators who actually have the resources to compete in a legal battle with ASIC and such battles ASIC usually runs from like a typical school yard bully when stood up to.
Competition. That’s for other industries. It’s much easier to regulate a couple of largish, fatish, sluggish entities with similar business models than to regulate a diverse economic eco-system.
Yeah yeah. The regulators are all macho now post-Hayne. But what about some responsibility for actually creating the conditions, of eliminating the small to create the big.
Adam. Honestly. You need to speak to people other than un-named “former senior ASIC officials” who could be anyone from the person signing visitors in at reception to former Chairs.
And if this is the depth of your analysis and reflection, then perhaps ….
We regulate financial services because banks enjoy an implicit guarantee and a government licence to create money.
NO. The implicit guarantees that banks receive and the power to create money is why we regulate BANKS. This is not a reason to regulate financial services.
Deregulation as a general principle may well improve the country’s economic performance, but it shouldn’t be the responsibility of law enforcement agencies.
Rubbish. Unproven and unsupported rubbish. Financial services has never been about re-regulation or de-regulation. It is about right-regulation. It is because there is a public good, via things like a lower cost of capital, lower transaction costs and the spillovers from trust in the system. It is about right regulation and right regulators. Unfortunately what Australia has is the wrong regulations and the wrong regulators. With a special thanks to the bipartisan efforts of the ALP and the LNP in creating this regulatory cluster fluck
The opening paragraph may read amusing, but it is not actually correct:
Imagine if the police force code of ethics went something like this: “Police must strive to enforce the law with minimum disruption to the economy, without placing undue burden on criminals, while promoting the benefits of living within the law.”
It also neat and cute to refer the ASIC Act, but perhaps you should also have a look at the Corporations Act and the associated regulations.
What consecutive Australian Governments have created is a creature that will eat the economy. Just give it some time.
Using the cute police analogy, imagine the police having the power to write the laws they administer and then to set and keep the fines they charge. They feel like more police, sure. They can just increased fines and find new people to fine. A few conflicts of interest? Well this is what ASIC does.