This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/australia-news/live/2018/sep/28/banking-royal-commission-delivers-interim-report-live

The article has changed 6 times. There is an RSS feed of changes available.

Version 2 Version 3
'Greed has been the motive': banking royal commission interim report delivered – live 'A day of shame': banking royal commission interim report delivered – live
(35 minutes later)
So what do we know from the report so far?
That a culture emerged which placed “greed” above customers, and that was the “driver” for much of the misconduct we have seen;
That the regulators, Asic and Apra, were too close to the sector they were meant to be policing and rarely took full advantage of their powers;
The banks accept they have much to do to win back trust;
Further legislation is on the cards;
Labor has promised to establish a task force to enforce the commission’s final findings.
There is more to come – again, the final report is not due until February, and who knows what the political situation will look like then.
There are also more hearings to be held in November, when the sector’s policies are going to be under the microscope.
Labor will continue to use the Coalition’s reluctance to hold the commission against it, while pushing for it to be extended, while the government is going to promote the changes it has already made, as well as embracing what the commission tells it.
In short, it is going to be a rough few months for the banking industry, and this is only the beginning.
We will have a review of the full 1,000-page report for you very soon, and make sure you keep checking in daily for updates as the story rolls on.
Labor has also sent out its official response:
Today, Scott Morrison owes the nation an apology for standing in the way of the banking royal commission.
Twenty-six times he voted against it.
For 600 days the Liberals failed to act – at the same time as they were fighting to give the banks a $17 billion tax handout.
The release today of the Interim Report of the Royal Commission into Misconduct in Financial Services has highlighted shocking misconduct across the sector – and how disturbing it is that Morrison fought to protect the banks for so long.
The interim report asked the question about why the banking scandals happened and provided this stark and concerning response:
“Too often, the answer seems to be greed – the pursuit of short term profit at the expense of basic standards of honesty.”
And in a major criticism of the Abbott-Turnbull-Morrison government and a lack of financial regulator action:
“When misconduct was revealed, it either went unpunished or the consequences did not meet the seriousness of what had been done.”
Labor will now study the royal commission’s interim report and findings closely.
The Liberals have never taken this seriously – they were dragged kicking and screaming on this royal commission and gave it an unreasonably short timeframe. They can’t be trusted to properly act on these findings.
Today Labor is announcing we will crack down on the sickening rorts and rip offs that have been exposed through the royal commission.
If elected, a Shorten Labor government will establish a Financial Services Royal Commission Implementation Taskforce, to reform the culture of profit over people in the financial services sector.
The taskforce will be located within the Treasury and work closely with the Attorney General’s Department, and will oversee implementation of the reforms recommended by the royal commission to ensure that they are delivered swiftly and effectively.
The taskforce will consult with victims and victim groups – in recognition that they are the lived experience of the systemic misconduct in the banking sector.
Under a Shorten Labor government, Chris Bowen as treasurer will report to the parliament every six months on progress in implementation, until the recommendations are fully implemented.
The Liberals did everything they could possibly do to keep this misconduct hidden. For 600 days, they blocked a royal commission. The prime minister Scott Morrison voted against a royal commission 26 times, calling it a “reckless distraction” and a “QC’s complaints desk”.
Nobody can trust the Liberals to clean up this appalling misconduct. They always have been, and always will be, on the side of the big banks.
Labor will fight for ordinary Australians, and we are absolutely committed to cracking down on corporate crooks and misconduct in our financial services sector.
Labor called for this royal commission, Labor fought for this royal commission, Labor will establish a Financial Services Royal Commission Implementation Taskforce, and Labor will work day and night to protect Australian businesses and consumers from this appalling misconduct.
She finishes her press conference on that question.
On how the employees of Australia’s banking sector would be feeling today, Anna Bligh has this to say:
Australian banks employ some 140,000 Australians and many of them I think share the disappointment of every other Australian about what they’ve done. Sometimes in their own bank, sometimes in other banks, but nevertheless they feel impacted by the damage that does to the reputation of their industry.
Ordinary Australians go to work in a bank every day. Just like everyone else, they want to be proud of what they do. They have an interest – whether these matters have occurred in their bank or someone else’s bank, they all have an interest in improving the worthiness of the Australian banking industry so every Australian can feel proud of their banks and hold them up as amongst the best in the world.
Anna Bligh says every bank needs to take the report seriously:
Every bank will need to examine this report individually for what it means for their bank but I think it’s critical that banks come together as a whole industry and also consider how to lift standards right across the industry. Not only in their own bank but working to lift standards and to standardise behaviour where that is possible.
Anna Bligh says the Australian Banking Association would be open to make its code of conduct stronger:
That’s what is delivered through the banking code of practice overseen by the ABA. If there are further matters that can be included in the code to improve it, make it stronger, that’s something we would look at taking on board.
Josh Frydenberg has released his official response:
The Liberal-National government has today welcomed the interim report of the royal commission into misconduct in the banking, Superannuation and Financial Services Industry and tabled it in parliament.
The government established the royal commission on 14 December 2017 with a broad remit to inquire into the practices of financial institutions. The government provided funding of $75 million to enable the commission to undertake its work. The commission has already held six rounds of hearings and received more than 9,000 submissions.
The interim report and the royal commission’s hearings to date make clear that some financial institutions have fallen far short of treating Australians honestly and fairly.
The government is committed to taking strong action to reform the financial sector and has continued to progress a comprehensive reform agenda to better protect consumers, ensure institutions and their executives are held to account for illegal behaviour and the financial system is safe and robust.
The government has:
established the Australian Financial Complaints Authority (AFCA) – a new one-stop shop to resolve customer complaints;
created a framework to hold banking executives accountable for their actions (Banking Executive Accountability Regime);
boosted banking and financial services competition to benefit customers; and
provided the Australian Securities and Investments Commission with an additional $70 million of funding, significant new powers and appointed deputy chair Daniel Crennan QC with a key focus on enforcement action.
There is clearly more work to be done and the government looks forward to receiving the royal commission’s final report, which is due by 1 February 2019, and acting on its recommendations.
The government thanks Commissioner Hayne and the commission for their outstanding efforts to date.
Anna Bligh says the banks have a lot of work to do.
Australian banks have a big challenge ahead of them. Their job now is to work to do everything possible to find the problems and fix them, to learn the lessons, to repay every penny and, importantly, to work to earn the trust of Australians back again. This country needs a banking system that everyone trusts. It’s critical to the economy and it’s critical to the wellbeing and happiness of every Australian. They want to be able to trust their banks and banks need to be trustworthy for them.
She says this, but the final report is not due until February, which, if Scott Morrison sticks to the plan, is just a a short throw from when the federal election is due.
Anna Bligh is now delivering her response. The former Labor Queensland premier faced some heat before stepping in as the banking sector’s spokeswoman – and it wasn’t that long into the job before she found herself defending the banks as they faced what was, by then, an inevitable royal commission into their actions:Anna Bligh is now delivering her response. The former Labor Queensland premier faced some heat before stepping in as the banking sector’s spokeswoman – and it wasn’t that long into the job before she found herself defending the banks as they faced what was, by then, an inevitable royal commission into their actions:
Our banks have failed in many ways. Failed customers, failed to obey the law and failed to meet community standards.Our banks have failed in many ways. Failed customers, failed to obey the law and failed to meet community standards.
And all of these failures are totally unacceptable.And all of these failures are totally unacceptable.
Too many customers have been hurt and it has to stop. Too many customers - customers want to see a much better deal from their banks. Too many customers have been hurt and it has to stop. Too many customers – customers want to see a much better deal from their banks.
Australians have every right to expect the world’s best banks. It is clear today that as an industry we have failed to deliver that.Australians have every right to expect the world’s best banks. It is clear today that as an industry we have failed to deliver that.
Make no mistake, today is a day of shame for Australia’s banks. Having lost the trust of the Australian people, we must now do whatever it takes to earn that trust back. Banks accept full responsibility for their failures and right now in every bank people are working day and night to make things right for their customers. To move from a selling culture to a service culture, there is much more work to be done in every bank.Make no mistake, today is a day of shame for Australia’s banks. Having lost the trust of the Australian people, we must now do whatever it takes to earn that trust back. Banks accept full responsibility for their failures and right now in every bank people are working day and night to make things right for their customers. To move from a selling culture to a service culture, there is much more work to be done in every bank.
But every bank is determined to find the problems, to fix them and to payback every penny.But every bank is determined to find the problems, to fix them and to payback every penny.
All Australians need strong and stable banks, but more importantly every Australian deserves a fair and trustworthy bank.All Australians need strong and stable banks, but more importantly every Australian deserves a fair and trustworthy bank.
This report is the first step to building the banks that Australians deserve. All banks will now take the time to examine the report in detail and do all that must be done to make things right.This report is the first step to building the banks that Australians deserve. All banks will now take the time to examine the report in detail and do all that must be done to make things right.
The banks will in time be making a submission that addresses the questions in the report and providing that as requested to the royal commission.” The banks will in time be making a submission that addresses the questions in the report and providing that as requested to the royal commission.
The major banks have seen between a 1.6% jump in share price - for AMP to 3.0% for NAB since the interim report was made public.The major banks have seen between a 1.6% jump in share price - for AMP to 3.0% for NAB since the interim report was made public.
ACTU head Sally McManus has given her take on the interim report:ACTU head Sally McManus has given her take on the interim report:
The treasurer has admitted that banks have put profit before customers. He, and his government, should act to get banks out of super and protect the retirement incomes of working people.The treasurer has admitted that banks have put profit before customers. He, and his government, should act to get banks out of super and protect the retirement incomes of working people.
We need to get the banks out of super. Industry funds are non-profit, run for members, and produce better returns. There is no upside to the banks for anyone other than their shareholders.We need to get the banks out of super. Industry funds are non-profit, run for members, and produce better returns. There is no upside to the banks for anyone other than their shareholders.
The banking sector needs urgent reform to ensure that customers and workers are treated properly and that the actions revealed by this commission are not allowed to continue.The banking sector needs urgent reform to ensure that customers and workers are treated properly and that the actions revealed by this commission are not allowed to continue.
We are now waiting on the Australian Banking Association’s Anna Bligh’s response.We are now waiting on the Australian Banking Association’s Anna Bligh’s response.
(As to where is Bill Shorten?)(As to where is Bill Shorten?)
Tanya Plibersek:Tanya Plibersek:
I think he’s been a dad looking after his kids during the school holidays, actually. He’s allowed to have a week of leave. He’s a normal person with family responsibilities and I’m not really sure whether – you know, what the implication is. He’s allowed to have leave and he’s particularly allowed to be a dad every time and again. We know the toll that politics takes on family life. Good on him, good on him for actually being around.I think he’s been a dad looking after his kids during the school holidays, actually. He’s allowed to have a week of leave. He’s a normal person with family responsibilities and I’m not really sure whether – you know, what the implication is. He’s allowed to have leave and he’s particularly allowed to be a dad every time and again. We know the toll that politics takes on family life. Good on him, good on him for actually being around.
Now, we have heard this argument put forward quite a bit: that the royal commission could have the unintended consequence of making the banks “too cautious” and inadvertently hurting families and businesses by not giving loans where they usually would.
To that, Tanya Plibersek says:
I think this is the response that gets trotted out every time there is a demand for the sector to behave according to the law. Parts of the banking or financial services sector say, ‘Well, if we’re forced to behave according to the law, then credit will dry up for individuals and businesses.’
I don’t think that is a legitimate complaint or a legitimate concern. The very least we should expect is for the sector, as a whole, to abide by existing laws and to perhaps go a bit beyond that and put the interests of their consumers at the centre of their decision making.
I think it’s a false and very convenient claim for them to make that if they’re forced to do the right thing then credit will dry up. We’ve heard it before. I don’t credit it.
.@tanya_plibersek: Labor is calling for the banking royal commission to be extended to hear the testimony of more victims. MORE: https://t.co/4Zn0rN80nM #SkyLiveNow pic.twitter.com/bFGXlYy57Y
The acting Labor leader again points out that she has only just received the report, which, at about 1,000 pages, is not exactly easy reading.
But Tanya Plibersek’s takeaways are similar to Josh Frydenberg’s conclusions:
I think the commissioner is pointing to two major issues here. The first major issue is that you’ve got a whole sector driven by greed without due regard to the needs of consumers in the sector. The second major problem is that both Apra and Asic appear not to have acted on reports in a way that would protect consumers as a class from this bad behaviour.
I think both of those issues need to be taken up by future reforms, to make sure that customers’ interests are protected and to make sure that when systemic poor behaviour is uncovered, like we’ve seen, that actually the regulators take proper action to fix it.
Tanya Plibersek uses the opportunity to announce Labor’s reaction to the royal commission’s final report, when it is handed down (at this stage) in early February:
If elected, a Shorten Labor government will establish a financial services royal commission implementation taskforce to reform the culture of profit-over-people in the financial services sector. The taskforce will be located within Treasury and work closely with the attorney general’s department and will oversee implementation of reforms recommended by the final report of the royal commission to ensure that they are delivered swiftly and effectively.
The taskforce, of course, will work closely with victims and their advocates in recognition that the lived experience of the systemic misconduct in the banking sector should inform the response.
Under a Shorten Labor government, Chris Bowen as treasurer will report to the parliament every six months on progress in implementation until the recommendations of the royal commission are fully implemented.
Plibersek again calls for the royal commission to be extended:
More than 9,000 submissions have been received by the royal commission, but so far only 27 customers have had the chance to tell their stories publicly.
Given this damning interim report, we believe that there is a strong case to consider extending the banking royal commission in order to hear from more victims in more places, in more parts of Australia.
Scott Morrison wanted to keep this shocking misconduct by the banks secret from the Australian public. This is the report that Scott Morrison never wanted. If it had been left up to Scott Morrison, banks would still be behaving this way.
If it were up to him, the horrific stories would never have been told and the conduct would have continued. The Liberals have spent five years fighting for the top end of town.
They delayed acting on the royal commission for 600 days. They voted against it 26 times. We know whose side they are really on. The Liberals can’t be trusted to act on these findings and to clean up the finance industry. They have always been, and always will be, on the side of the big banks.”
Expect to hear this quite a bit as we get closer to the election – Labor points out that the Coalition did not want the royal commission – and Tanya Plibersek again uses some of Scott Morrison’s own previous words against him:|
It was about 2.5 years ago, in April 2016, that Labor called for this royal commission to be established.
The Liberals fought tooth and nail against the establishment of the royal commission for more than 600 days. They wanted to protect the banks. In fact, they wanted to give the banks a $17 billion tax cut. Scott Morrison voted against this royal commission 26 times. Scott Morrison called it, and I quote, ‘A reckless distraction’, and I quote ‘A QC’s complaints desk, a populist whinge’.
The Liberals have never taken this seriously. They were dragged kicking and screaming into holding a royal commission and they gave it an unreasonably short time frame.”
Tanya Plibersek says Labor has only just received the report, but her first impressions are:
“Too often, as the interim report says, behaviour [was] driven by greed.
“The pursuit of short-term profit at the expense of basic standards of honesty is an indictment of the behaviour we have seen.
“If it was up to the Liberals the banks would still be behaving this way.
The interim report says, ‘When misconduct was revealed it either went unpunished or the consequences did not meet the seriousness of what had been done. The regulator, Asic, rarely went to court to seek public denunciation of and punishment for misconduct. The prudential regulator, Apra, never went to court.’
“So, of course, Labor welcomes this interim report of the financial services royal commission.
“We thank the commissioner and counsels assisting and all of the staff of the royal commission for the work that they’ve done to date.
“Most importantly, we thank the brave Australians who have come forward to tell their stories.
“Australians have been appalled by conduct in the financial sector that has been exposed by this royal commission.
“Conduct such as charging fees to dead customers, lying to regulators, shonky advice that has robbed Australians of their life savings, approving loans that customers could not possibly afford to repay, forcing farmers off the land and out of their homes, pressuring vulnerable Australians to buy insurance over the phone.”
.@JoshFrydenberg on the interim report into misconduct by the banking and financial sector: we will take the action necessary to restore the public's trust in our financial system. MORE: https://t.co/v1dbyZrheY #SkyLiveNow pic.twitter.com/At8atZulwq
Acting opposition leader, Tanya Plibersek, will also respond to the report’s findings shortly.
Back to Hayne’s report.
After his scathing assessment of the behaviour of Australia’s major banks and regulators, he asks what needs to be done.
He makes a point of noting how the banks have been scrambling, as the royal commission has unfolded, to get ahead of the political and regulatory game. Their behaviour hasn’t impressed him.
As the Commission’s work has gone on, entities and regulators have increasingly sought to anticipate what will come out, or respond to what has been revealed, with a range of announcements. These include announcements about new programs for refunds to and remediation for consumers affected by the entity’s conduct, about the abandonment of products or practices, about the sale of whole divisions of the business, about new and more intense regulatory focus on particular activities, and even about the institution of enforcement proceedings of a kind seldom previously brought. There have been changes in industry structure and industry remuneration. “...This interim report seeks to identify, and gather together in Chapter 10, the questions that have come out of the commission’s work so far. There will be a further round of public hearings to consider these and other questions that must be dealt with in the commission’s final report.”