Business

Feb 7, 2018

Imagine if our lazy banking oligopoly had to answer to US regulators

Say what you like about the Americans, but their corporate regulators make ours look like PC Plod.

Glenn Dyer and Bernard Keane

Crikey business and media commentator / Politics editor

If you want to see the yawning chasm between US and Australian corporate regulators, look no further than the contrasting fates of Wells Fargo and the Commonwealth Bank today.

The Commonwealth Bank’s interim results show that the Austrac scandal, greater regulation and heavier macro-prudential controls on lending have had zero negative impact on its profits -- indeed, might have bolstered them. The $375 million estimate from the bank for the cost of the Austrac case, and $200 million in costs for "remediation", is a pin prick. And the government’s new (the legislation was passed today by the Senate) banking executive accountability regime, or BEAR, won’t apply retrospectively. Sure, there's a royal commission lumbering into action (at a decidedly slower pace than the trade union royal commission got up and running -- funny that) but that's limited to a year and the whole thing is designed to minimise the potential reputational damage to the banks.

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4 comments

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4 thoughts on “Imagine if our lazy banking oligopoly had to answer to US regulators

  1. Wayne Cusick

    As far as the penalties for Wells Fargo, the financial hit will hurt the company, but I’m sure those responsible won’t pay a dime. They should go to jail.
    But I guess the US has one of those deferred prosecution rules for executives.

  2. zut alors

    ‘…shaking in their Aquilas.’

    You must be joking, those at the top of the CBA heap will be wearing Gucci or J M Weston. And they’ll probably be shaking with suppressed mirth.

    The US interrogation of Wells Fargo execs was fortunate to have firebrand Elizabeth Warren (Dem, Massachusetts) putting the suits under the griller. She didn’t hold back or mince words, it was a joy to watch those scoundrels sweat as she insisted they answer. The execs were left wide-eyed, speechless…& their silence was damning.

  3. 3 Policy Options

    I hope Crikey will be active in reporting on the Royal Commission. The initial actions by the Commission has all the makings of a whitewash and Judge Hayne needs a few more Commissioners. The Banking Royal Commission in the 1930’s had Ben Chifley – maybe Paul Keating could get a run?

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