What on earth were APRA thinking when they let off the CBA with a stern reprimand ? What were AMP thinking appointing David Murray to chair their Board? It looks like telling the fox that next time you’ll shoot him, and in the other case appointing the fox to guard the chicken coop.
At some stage the “authorities” and responsible parties must take the findings of admitted gross misconduct seriously. The “blind eye”, wilful or negligent, which the CBA turned to thousands of breaches of AUSTRAC requirements allowing criminals to launder proceeds of crime is no minor infraction; it is, at worst, abetting criminal activity, at best criminal negligence. Requiring money to be put aside for contingent consequences is hardly a penalty. Anyone else dealing in the proceeds of crime, let alone profiting from it, as the bank did, would almost certainly have got a custodial sentence. You would think that APRA might have been better advised to refer the facts to the Director of Public Prosecutions. At the very least, fines at a level some multiple of profits made by the bank for its infraction would at least be appropriate. When the level of misconduct is such as admitted to, the authority which issues the bank with its licence to operate, the RBA or APRA, should, at the very least, consider whether that licence should continue, perhaps with much more intrusive and transparent supervision, or suspended, or taken away altogether. That the banks feel so invulnerable that they have not revealed any retribution against the architects of the misconduct, let alone those that did it – that surely cannot continue. If a dole cheat can get gaol for a few thousand, surely a severe penalty for millions of dollars obtained by misconduct is the least the public expect.
Memo to Kenneth Hayne: Think about beefing up regulation, and penalties that hurt.
One of the sad facts arising out of all this is that it is the “club of invulnerables” who need to be brought to book. The regulators are often former bank persons, or at least believers in the “too big to fail” mantra. The regulators can no longer be mates with the regulated: they should be primed to prosecute to the limit the institutional theft and deception of customers. That is their job.
So what about David Murray? At the very least he was instrumental in turning the Commonwealth Bank into a short-term, profit-hungry, customer-deserting institution. He is one of “them”. To save its severely damaged reputation, the AMP should have found someone at more than arm’s length from the industry that is so badly tainted by its culture of profits and shareholders first, customers last.
Today’s SMH has a compendious piece by Peter Hartcher (no left wing rager) decrying the deficits in public morality, so you might say I am not alone in calling for serious thought on these matters. The decline in belief in fair play by calling it “business”, i.e., Devil Take The Hindmost, or, more classically, caveat emptor, is a defining characteristic of capitalism as we have come to know it.
Memo to Kenneth Hayne: Without regulation “businessmen” will do whatever turns a quid.
Jim Coombs is a almost retired magistrate and former criminal lawyer and economist.