Brent and ‘Richo’ talk about many topics today including the banking royal commission and some of the discoveries that have surfaced, more on the commonwealth games opening and closing ceremony cost $47 million dollars or $191000 a minute and footy!
Listen to the podcast.
AMP, CBA and other banks may be crooks — but ASIC’s been our problem
by Graham Richardson
If you thought the scandalous revelations of criminal misconduct by AMP at the financial services royal commission would be the low point for our financial institutions, you were proved wrong within 24 hours.
A day after AMP finally admitted to misleading the Australian Securities & Investments Commission on more than 20 occasions and charging thousands of customers for services it never rendered, the Commonwealth Bank demonstrated it was even worse and seemed almost proud to claim the gold medal for being truly rotten to its core.
In days gone by it must have been wonderful to be promoted into the upper echelons of these banking behemoths, but today it is a potential entry card to spending several years as a guest of Her Majesty, albeit not at Buckingham Palace but at a somewhat less luxurious institution.
On behalf of AMP, its head of advice, Jack Regan, gave spectacular testimony while seeming quite oblivious to the dangerous nature of his admissions.
No doubt before any of the bank representatives testify before the royal commission they are coached by teams of in-house lawyers and expensive hired guns. Before putting their heads on the guillotine block, bank executives should think long and hard about following the lines these legal conferences produce.
On Wednesday, a senior CBA executive proved the wisdom of that call.
When the executive general manager of Commonwealth Private, Marianne Perkovic, took the stand, she was the mug who had to say yes when asked by counsel assisting the commission, Michael Hodge QC: “Can I make sure that I’m understanding the reason you’re so emphatically emphasising what you describe as ‘context’?
“Is the explanation that you want to offer as to why it is that it took CBA more than two years to notify ASIC of its ongoing service fee problems that CBA systems were so hopeless that it had no idea what was going on in its business?”
So here is our biggest bank — which announces quarter after quarter, year after year, billions of dollars in profits — offering as an excuse for robbing its customers the insight that it is such a moribund, useless organisation, it didn’t really know what it was doing.
If Perkovic was following instructions, I would love to know which genius or genii came up with that one.
Mind you, Perkovic was on a roll and her next assignment in obfuscation was to attempt to murder in cold blood the English language. She should have been aware just how thin was the ice she was treading on when commissioner Kenneth Hayne felt obliged to intervene to urge her to answer the question and told her it would be “safer for you” if she did.
Perkovic, though, was a bit like Margaret Thatcher — the lady was not for turning.
You can understand the frustration and irritation of Hodge, and why he accused Perkovic of “dissembling”, when you read this particular answer: “I’m just trying to explain to you, in this two-year period before we actually identified that we actually had a problem with OGS (ongoing services packages), as to what we were solving for with the information that was in front of us in a broader context of the business.”
The legal eagles who briefed her omitted telling her a very important point — when you are caught with your hand in the till up to your armpits, you should cop it on the chin and answer questions directly.
This woman was set up to take the fall on behalf of others in the bank, above her pay grade, who sanctioned these rip-offs.
Let’s hope the commission gets around to finding just who these others are.
As I am writing this column I have just seen this headline feature on Sky News: “Commonwealth Bank under fire for charging customers when they are dead”. You don’t need to ask “which bank”, it could only be the Commonwealth.
What troubles me after all this is the question of which way ASIC will go in prosecuting the miscreants. Its history of dealing with large financial institutions, including AMP, is riddled with enforceable undertakings ignored by those who sign them.
The undertakings are ignored because AMP and others are confident ASIC will lie down on the job and let them get away with it. If they are fined one or two million dollars, they pay the fine and continue their malpractice.
Big corporates have been absolutely confident they can treat ASIC as mugs, because they are. If AMP is so cocky that it can admit to wilfully misleading the regulator on more than 20 occasions, it must have been pretty confident that a slap on the wrist was the worst penalty it could be dealt.
Whether being treated with so little regard wakes ASIC and its new chairman up from their deep slumber is another matter. Although Treasurer Scott Morrison seems confident ASIC will look at criminal charges, the record suggests that is not likely.
ASIC has done little or nothing about banks owning financial planners that in turn put clients into their own funds even if the rate of return is lower. The practice screams conflict of interest, yet still we read about how well AMP has profited from this rort.
Given what we have all read and seen in recent days, Australians honestly hope that some bankers really do get their comeuppance.
The mob worked the banks out years ago and will now wait and see whether ASIC has the internal fortitude to do something serious about them.