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| Banking royal commission: Tony Abbott calls for regulators to be sacked – live | Banking royal commission: Tony Abbott calls for regulators to be sacked – live |
| (35 minutes later) | |
| Before Tony Abbott’s spray at the regulators of banks, the chair of the Australian Competition and Consumer Commission Rod Sims was blaming lack of significant penalties and legal delays for bank misbehaviour. | |
| On Radio National, Sims welcomed the government’s announcement it will increase penalties in the financial sector, arguing that company boards needed to know there would be “really dire consequences” if they breach the law, rather than treating it as a cost of doing business. | |
| “What I have found very sad about watching the royal commission is you’re getting bankers both past and present who say ‘we’d like to do the right thing but if we did the right thing it’d damage our share price and our profits’. Ok let’s change the equation. If you’ve got to factor penalties of hundreds of millions of dollars in, it actually does matter to your bottom line if you breach the act,” he said. | |
| Sims said penalties were increased for competition law breaches in 2007 but the ACCC had “had difficulty convincing the legal fraternity that parliament has actually changed the rules”. He suggested courts were following old precedents and continuing to give penalties in the tens of millions. | |
| Sims noted that the ACCC is responsible for competition and a “fair bit” of the unconscionable conduct uncovered by the royal commission comes under the domain of the Australian Securities and Investment Commission. | |
| He said he “wont’ comment” on Asic’s performance but agrees with Nationals senator John Williams that “you have to be feared”. | |
| Orr is drilling into the way incentives at ANZ financial planning affected the working culture. | |
| She’s asking about advisor “leaderboards”. We’re told the leaderboards no longer exist, but that previously they ranked financial advisors based on – Rixon says – “certain criteria”. | |
| Orr suggests it would be correct to assume revenue would have been part of the makeup of those leaderboards. Rixon admits that’s correct. | |
| “What does that say about the culture within the ANZ financial planning [division]?” Orr asks. | |
| Rixon responds that revenue is “just one of the factors” that made up the leaderboard rankings. 15% of the rankings, as it were. | |
| From the wires: a law firm is investigating a possible class action against financial services giant AMP, which has admitted to lying to customers, AAP reports.Quinn Emanuel Urquhart & Sullivan is looking to hear from shareholders who’ve seen the company’s stock plummet.AMP shares lost more than $1bn in market value last week after the damning evidence presented to the financial services royal commission. | |
| Kylie Rixon, the chief risk officer for “digital and wealth” at ANZ, is up first this morning – basically she’s in charge of managing risk for the bank’s financial services arm. | |
| We’re hearing about the relationship between the bank’s financial services arm and the four associated entities through which it also offers financial services. Rowena Orr, the senior counsel assisting the commission, is asking about the financial adviser incentives that were in place prior to the 2013 FOFA reforms. | |
| In her witness statement, Rixon said the previous arrangements, which included incentives for bringing in new revenue, created a “culture of emphasising business more than the best interest of the client”. | |
| Orr is asking about the current incentive scorecard for managers, which Rixon admits still contain a 15% “scorecard” incentive for managers who bring in new revenue. | |
| The former prime minister Tony Abbott has found a new point of difference in the bank royal commission fallout, with a fiery call to sack all existing regulators this morning. | The former prime minister Tony Abbott has found a new point of difference in the bank royal commission fallout, with a fiery call to sack all existing regulators this morning. |
| Abbott told 2GB Radio: | Abbott told 2GB Radio: |
| “The thing that worries me, Ray, is what were the regulators doing? I mean we all know there are greedy people everywhere, including in banks ... but banking is probably the most regulated sector of our economy - what were the regulators doing to allow all of this to be happening? ... | “The thing that worries me, Ray, is what were the regulators doing? I mean we all know there are greedy people everywhere, including in banks ... but banking is probably the most regulated sector of our economy - what were the regulators doing to allow all of this to be happening? ... |
| “My fear is that at the end of this royal commission we will have yet another level of regulation imposed on the banks when, frankly, what should happen is, I suspect, all the existing regulators should be sacked and people who are much more vigilant and much less complacent [should] go in their place. | “My fear is that at the end of this royal commission we will have yet another level of regulation imposed on the banks when, frankly, what should happen is, I suspect, all the existing regulators should be sacked and people who are much more vigilant and much less complacent [should] go in their place. |
| “The analogy is – yes punish the criminals but if the police are turning a blind eye to the criminals, well, you’ve got to get rid of the police and get decent people in there.” | “The analogy is – yes punish the criminals but if the police are turning a blind eye to the criminals, well, you’ve got to get rid of the police and get decent people in there.” |
| The behaviour by the financial services industry uncovered so far has been shocking. Last week AMP admitted to lying to regulators, and the Commonwealth Bank admitted some of its financial planners have been charging fees to clients who have died. | The behaviour by the financial services industry uncovered so far has been shocking. Last week AMP admitted to lying to regulators, and the Commonwealth Bank admitted some of its financial planners have been charging fees to clients who have died. |
| While we’re waiting for kick-off from the hearing today, our economics correspondent Gareth Hutchens has written this handy primer on everything you need to know about what the commission is looking at and what we’ve learned so far. You can also read a bit more about the human faces at the heart of the stories of malpractice. | While we’re waiting for kick-off from the hearing today, our economics correspondent Gareth Hutchens has written this handy primer on everything you need to know about what the commission is looking at and what we’ve learned so far. You can also read a bit more about the human faces at the heart of the stories of malpractice. |
| Good morning. | Good morning. |
| Welcome to our live coverage of today’s hearing from the royal commission into the banking, superannuation and financial services industry. Today the commission turns its attention to ANZ and returns to AMP after last week’s explosive advice that resulted in the resignation of its CEO. Later it will hear about NAB’s financial advisers. | Welcome to our live coverage of today’s hearing from the royal commission into the banking, superannuation and financial services industry. Today the commission turns its attention to ANZ and returns to AMP after last week’s explosive advice that resulted in the resignation of its CEO. Later it will hear about NAB’s financial advisers. |
| This morning Malcolm Turnbull admitted the Coalition made a “political mistake” by refusing to set up a royal commission into banks for so long but defended the decision, arguing it helped put “customers first”. Paul Karp has that story here. | This morning Malcolm Turnbull admitted the Coalition made a “political mistake” by refusing to set up a royal commission into banks for so long but defended the decision, arguing it helped put “customers first”. Paul Karp has that story here. |
| Overnight Labor called on Turnbull to set up a compensation scheme for victims. | Overnight Labor called on Turnbull to set up a compensation scheme for victims. |
| Yesterday the financial services minister, Kelly O’Dwyer, had a tense exchange with Insiders host Barry Cassidy over whether the Coalition had excessively delayed the inquiry. She maintained it had taken a deliberate approach, despite agreeing that the royal commission would be good for consumers. This morning the Nationals senator John Williams – who for a long time was the only person in the Coalition party room calling for a royal commission – told ABC radio that he was “quite amazed” at the unwillingness to apologise. | Yesterday the financial services minister, Kelly O’Dwyer, had a tense exchange with Insiders host Barry Cassidy over whether the Coalition had excessively delayed the inquiry. She maintained it had taken a deliberate approach, despite agreeing that the royal commission would be good for consumers. This morning the Nationals senator John Williams – who for a long time was the only person in the Coalition party room calling for a royal commission – told ABC radio that he was “quite amazed” at the unwillingness to apologise. |