To senior people at Westpac the AUSTRAC charges seemed like a minor technical glitch. Instead they’d been handed a grenade which exploded in their faces. The media portrayal has been of greedy bankers who would engage in anything to make a profit. This SMH editorial begins:
After the royal commission into the financial sector last year, many pundits said that trust in banks could not go any lower. Westpac has proven them wrong.
Less than a year after Kenneth Hayne delivered his report about rip-offs and illegal sales tactics by Australia’s most profitable financial institutions, Australia’s second largest bank has been pinged for breaches of money laundering and anti-terrorism laws, including facilitating payments to paedophiles in the Philippines.
The actual is a little more prosaic, as the editorial goes on to tell:
Westpac’s latest failures raise different issues to the Hayne inquiry. This is not a case of bank managers ordering their staff to act unconscionably or flawed incentive payments. Westpac’s crimes here are arguably more those of omission than commission. It failed to implement and check the IT systems required to properly detect and report suspicious transactions. (Emphasis added)
Continue reading Westpac’s woes
1. Kavanaugh makes it, but…
2. Fat rich banks not “unquestionably strong”
3. Humans a pestilence upon the earth?
4. A new low for Trump
5. Wentworth in play
Continue reading Weekly salon 7/10
1. How not to run a party or a government
Malcolm Turnbull in announcing a royal commission into Misconduct in the Banking, Superannuation and Financial Services Industry, to be led by former High Court judge Kenneth Hayne, told us that the inquiry was entirely unnecessary, but the government was a couple of seats short and had effectively lost control of the agenda.
Chris Bowen, shadow treasurer, formally wrote to his counterpart Scott Morrison (AFR, pay-walled), saying that the inquiry was neither far-reaching enough nor adequately resourced, that there had been inadequate consultation over the terms of reference, plus the deliberate targeting of union-dominated industry superannuation funds – a political strategy which diminished its credibility. Continue reading Saturday salon 1/12
That was Ben Eltham on 6 November. Then you can go anywhere, for example:
Continue reading Saturday salon 25/11 – very late edition
When Prof Jason Sharman told Phillip Adams that half a million dollars was stuffed into the new intelligent deposit machines installed in the Commonwealth Bank from 2012, and then did the same for the next three years, it sounded incredible, and if true, could only happen with complicit corruption. Seems it didn’t happen quite like that, but what authorities say did happen is staggering and quite bizarre. Continue reading Drug syndicates turned CBA into a money pump, but the whole financial system is at risk
For now same sex marriage takes centre stage, but journalists and pollies have taken time out to unload on the Commonwealth Bank, forgetting that their own esteem in public eyes hovers around that of used-car salespersons. Also most have never organised anything bigger than a booze-up in a brewery, so the chances of them understanding how large businesses work is close to zero.
We’ll have to wait for the court case to find out what really happened, but there have been a couple of articles in the AFR, and an ABC TV interview with the chair of the board, Catherine Livingstone, so here is my best estimate as to what happened. Continue reading Which bank under heavy fire
Now that the CEOs of the Big Four banks have been questioned by the Parliament’s Economics Committee it’s time to ask, what now? The Committee is a House of Representatives organ. It’s generally acknowledged that the heavy hitters for this kind of exercise are in the Senate. These mega-salaried CEOs are teflon-coated, obviously well-briefed, and it’s reasonable to wonder whether anything will change as a result of the hearings. Not much, I suspect.
David Gallagher of the Centre for International Finance and Regulation, probably a conservative outfit, says:
The government is using the exercise as a classic case of retail political management, being seen to be keeping our major banks accountable while the Opposition calls for a royal commission into the banking industry.
Gallagher is arguing that the wrong-doings of the banks are not substantial or endemic enough to warrant a royal commission, and that our regulatory system is world-class and fit for purpose. I think he should have been listening to talkback radio over the last few days. Continue reading Banks get thrashed with feather dusters
1. Stupidity over SA blackout
“Ignorant rubbish” is what Victorian Premier Daniel Andrews called Malcolm Turnbull’s initial comments on the SA electricity blackouts. “It’s the weather, stupid”, is more or less what Bill Shorten said, and he was right. The press has reported two ‘tornadoes’ in the north of SA which made pylons look like this:
The questions to be asked in this case are not about the reliance on renewables, rather on why fractures to the grid 200 km north of Adelaide took the whole state down. Continue reading Saturday salon 30/9
Politicians have been out there bashing banks again with CBA’s announcement of a record $9.45 billion profit. Of course if the bank keeps up with inflation it will be a record, and because it’s a big company it will be ‘fat’.
The table in the AFR gives the profit as $9.247 billion as against $9.084 billion last year. The true measure is in net earnings per share (eps) which came in at 542.5 cents, actually down from 553.7 cents last year. That’s a drop of about 2%.
The final dividend was maintained at $2.22 per share, so shareholders breathed a sigh of relief that it didn’t go down.
Bill Shorten’s comment was ignorant, and I think disgraceful: Continue reading Fat bank profits
1. Midnight Oil to burn again
Midnight Oil, led by the former Hon. Peter Garrett, Minister for the Environment and Minister for Education, are returning to a high-ticket priced venue near you.
Simon Tatz says:
Once again, we’ll witness the gangly mantis, this time just plain old Pete Garrett, belt out songs condemning American military imperialism, condemning the loss of Indigenous land rights and noting that beds, as well as pink batts, keep burning. Continue reading Saturday salon 5/5 (late edition)