The Treasurer has asked the ACCC to investigate the banks over their latest grubby profit-gouging moves.
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Yes, but would the Treasurer have made the request not knowing what the outcome will be?
When are we likely to know?
‘In the fullness of time, minister’ to borrow from another.
P.S.
No cynicism required now that I know all about XR (Extended Reality)?
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Possibly not.
The banks net interest margin has been declining for many years…
meaning that the net profit based on this interest rate has also been in decline.
One also needs to consider competing factors, retirees which rely in part on interest from cash investments. Any reduction in interest rates by the banks directly impacts on these retirees.
Edit: There are two sides to the story, which the media or politicans fail to recognise. It appears some of the banks do. One of the banks recently (it may have been the Bank of Queensland) indicated that every rate decision in the low interest environment now faced, the bank has to weight up the needs of cash holders with that of borrowers.
If a bank passes on the interest rate cut in full, usually there is a corresponding decrease in interest rate on cash deposits. The decline in cash deposit interest rates may have a far greater impact on their customers than a not in full passed on loan interest rate cut.
Where banks, especially those which rely on cash deposits to cover part of their loan liabilities, placing additional finanical stress on cash depositors may result in the monies leaving the bank to chase potentially higher interest rates elsewhere. If a stampeed occurred, this could impact on the stability of the banking system which could pose an enormous risk to everyone.
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Of course not! The outcome will be that banks’ costs of funds is far above the RBA cash rate. The banks will appear exonerated The government will be happy. Nobody else will be convinced.
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Money lending (eg finance and banking) historically has a poor reputation, often for a reason. Would historical net profit be what they feel entitled to? Is it what the are entitled to? Is that a metric reflecting a necessary return on capital considering risk and so on or the capitalists would go elsewhere to invest?
Just because an industry’s business environment is changing so their profits are down or harder to produce does not always justify ‘the way it was’.
It seems they weighting is fairly straightforward to disadvantage savers as well as borrowers when the former goes down more than the latter almost as a guaranteed response. When rates go the other way the banks are faster to respond and borrowing rates are usually bumped up more than saving rates, or in tandem at best.
A quick survey is that cash deposit rates have taken the full hit but loans, esp mortgages have not been commensurately reduced.
Many of the high interest accounts have associated games such as $1,000 of $2,000 per month deposits and 5 transactions, some with mandatory balance increases and no withdrawals, and so on. That inhibits some of the stampede because changing one’s deposit details for work or pensions as well as how those 5 transactions occur could be a never ending process repeated every few months. For 1/4% more interest?
I suspect the banks bank on ‘account changing fatigue’ to minimise that, so on they go with their historic positions.
Exactly.
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Another class action against CBA for ripping off superannuation customers.
And the ANZ takes another hit.
Whilst logging onto our CBA accounts this morning, I noticed this gem on the logon page.
Have your say at the CEO Customer Forum
What question would you like our CEO Matt Comyn to answer?
The link leads to this classic.
And if anyone actually believes this blatant piece of window dressing, then I have this really big bridge for sale. Really cheap. Painting not included.
Some more “good news” for Westpac.
And an article regarding the person who blew the whistle on the CBA’s corrupt and criminal conduct which led to the Banking RC.
He ended up losing his job and receiving death threats when he should have received a very substantial reward like the authorities offer for information in other criminal investigations.
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An article regarding the legal stoush between AMP and their former senior lawyer.
Whilst I am usually suspicious of lawyers’ intentions, I would definitely believe her over AMP anyday.
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And Westpac takes a haircut.
So sad, too bad.
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.Another article regarding the ongoing behaviour of the greedy banks.
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.An article regarding complaints received by the AFCA about the banks.
And the worst bank. Which bank? Yep, those grubs.
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.And some things never change, at least at AMP.
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.An article claiming that the banks are changing the rules regarding selling debt to collection companies.
Hopefully pickings will be a lot slimmer for the bottom-feeding grubs at Lion Finance and their ilk.
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The chickens keep on coming home to roost.
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.And so it continues.
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Now the figure on breaches that AUSTRAC are alleging Westpac allowed is over 23 million. The most probable outcome is they will not be required to stop operating, they won’t be closed and to be honest the likely fine will be a mere hiccup in their operations.
I’m guessing the fine will be a paltry Billion or so perhaps with the transgressions amounting to over $11 Billion over the 5 years. No one will ever in all probability face criminal charges. There will be some razzmatazz about how they are sorry, they won’t let it happen again, it wasn’t something they supported (for the 5 years it occurred you’d have to wonder), their audit culture was strong, they are accountable (except they won’t be), and so on the throwaway glib phrases will roll, no one will be required to refund their bonuses, and share allocations, and if the fine comes in really low (high to extremely high likelihood) then they will probably get extra bonuses and the share price will rise.
The Guardian in their article linked below wrote that “Westpac faces a theoretical maximum fine of between $391tn and $483tn, but if the breaches are found by the court it is unlikely to be ordered to pay anywhere near that amount”. The question must be asked why not?
Scott Morrison is appalled & has told them (and the other members of the Big 4) they “just have to lift their game”…what joke…if a person had done this they would be in jail until they came out a skeleton (under Anti Terror Laws, Child Pornography laws and Child Exploitation laws)
https://a.msn.com/r/2/BBX15IQ?m=en-au&referrerID=InAppShare&ocid=News
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Roll up. Roll up. It just keeps on happening.
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Westpac isn’t the only bank which has failed to report. I wonder if there is an issue with the legislation and/or its interpretation…or it is failing only on the bank industry side. Usually when there are more than one events, it may indicate the cause is broader than first thought.
It may be prudent for the government to review how and why the failing occurred,…to ensure that there isn’t room for improvement from a legislative, administrative or process point of view.
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And yet another one hot off the media.
All we need now is the 1977 hit song by KC & The Sunshine Band playing in the background.
“Keep It Comin Love”.
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The CEOs and boards who supposedly were awake then and now seem impervious to having to step down, unlike what happened at AMP. The farce of responsibility on the executive floors rolls on because banks are important, customers less so, and laws are apparently a side show to them except in lip service.
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Any hit to the bottom line has always been short lived.
The customers take a hit.
The shareholders take a hit. (Perhaps only short term, except for AMP which has been a basket case for a decade or longer)
And life as a company officer or director as noted, goes on.
I wonder just how much the economy also looses over time through the observed poor governance?
Possibly much more than the Centrelink generated Robo Debt set out to recover, noting that most of any such overpayments has likely gone directly into propping up the local economy. Although I’m not advocating stealing from the government is ok either, where there has been an attempt to deliberately defraud the system.
Should the bank/s at least repay the full value of all the transactions that should have been reported and stopped over time? In the end it does not hurt the perpetrators, nor as noted by @PhilT the leadership of each bank. Any costs come back to impact the customers and shareholders. It’s worth noting that nearly every super fund or pension paid from super has a component of value dependent on shareholdings in the banks.
As a consequence the big banks seem immune to a heavy hand, for fear of the fall out elsewhere. It’s almost saying stop us if you dare.
There remains a lesson for government in the history of the East India Company. Friend and utility belt to England for centuries, it was at one stage reputedly more powerful than the government that legislated its existence. Is there aspiration for our own institutions to reach such dizzy heights, or will government see the peril and act before it is too late?
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And another one.
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As I posted above the responsibility for the egregious faults will be quickly shuffled aside by those who should take the blame ie the CEO said almost exactly the Sorry line and the rest of the glib phrasing they use to distract from Management failures eg from the article @Fred123 linked directly above “The chief executive said he was “very sorry” it had happened and would personally lead the bank’s response into the matter”. So we know they likely aren’t sorry for the problems but they are very likely sorry they got caught.
Well yes it is prudent the Govt review:
1st reason is if AUSTRAC suddenly only became aware of the issue why wasn’t it caught well before this, they, AUSTRAC you would think had to be asleep at the wheel for 23 million plus incidents to occur over a 5 year period and they are only taking action now. Why wasn’t it nipped in the bud much much earlier, why wasn’t it caught?.
2nd reason is If they had been aware for some time eg 4 or 5 years why hadn’t they taken the action earlier again to nip it in the bud early on. This is a failure of AUSTRAC to carry out their roles and responsibilities.
Where is ASIC in this? Where is APRA? They too have broad responsibility for compliance and review action of these companies. Notably a gross lack of response from them re failures of management and Board responsiblities in the Banking sector. How are these Boards and Management still able to hold positions of responsibility?
I don’t just pick on Westpac here, as yes CBA had their toes stamped on for failures and again AUSTRAC, ASIC, APRA failed to take action early or at all, or to require more stringent adherence over years by the Banking industry. NAB, ANZ also do not escape critique of their performances and many other financial institutions. The Banking Royal Commission highlighted these failures by the Corporate Watchdogs just nowhere near was the failure so laid bare for all to see as what we are witnessing now. Even the Terms of the Commission were watered down to avoid much more forensic examination and recommendations about these Watchdogs.
With @PhilT’s post above Banking, insurance and finance news - #33 by PhilT I must wholeheartedly agree, as well as my full agreement with @mark_m’s post.
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The comment about the review maybe that the systems Westpac introduced during initial rollout of transaction tracking may have been based on the guidelines or policies at that time. As time moves on, it is likely that AUSTRAC monitoring systems (or government expectations) may have been significantly more sophisticated that that of the banks…leaving the banks potentially exposed.
If AUSTRAC is steaming ahead with policy/expectations and leaving the banks behind, this may require a look at from a government level and how banks keep up with the pace.
It is also interesting that AUSTRAC, ASIC and APRA allowed so many traction to occur which does raise the question were they asleep at the wheel as well. One would have expected if there are potential transactions which may impact on the national interest, Australia’s homeland or international security or be used by major crimes, they would be carrying out regular audits/monitoring of the financial institutions. Not doing so appears to indicate that they may have been asleep.
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It seems most if not all of the Westpac failures were actually self reported I am lead to believe. I surmise from this they were not detected by the watchdogs initially and so a AUSTRAC among other Watchdogs failures of their roles.
“Westpac chief executive Brian Hartzer said the bank had already publicly disclosed that it had self-reported failures around a large number of international funds transfers”
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I surmise none of the watchdogs have the budgets or capability to monitor or detect anything except their own payrolls. Maybe by design, maybe not, but how many of the recent ‘failures’ did any of them discover?
Seems they have been all (or close enough) self reported to avoid even higher penalties should they have ever been caught out. Following on, the penalties are also ‘agreed’. Such oversight!
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Nice opinion piece in the Guardian about what the writer thinks should happen and what likely will happen, both are miles apart in their outcomes:
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