The behaviour of Australia’s big four banks, as well as insurance and superannuation providers, will be scrutinised in the banking royal commission interim report. Photograph: Joel Carrett/AAP
The behaviour of Australia’s big four banks, as well as insurance and superannuation providers, will be scrutinised in the banking royal commission interim report. Photograph: Joel Carrett/AAP
Thanks for joining us today. Amy Remeikis had to run over to Ultimo to appear on the Drum, if you switch your television over to the ABC you may catch a glimpse.
Katharine Murphy will be along shortly with a wrap of the day’s news and Gareth Hutchens is furiously writing his analysis. In the meantime, here’s some of what we have learned today:
Commissioner Hayne’s summary of what went wrong in the financial industry is that greed – the pursuit of short-term profit at the expense of basic standards of honesty – was allowed to take over
The treasurer Josh Frydenberg has echoed that sentiment saysing banks and other financial institutions have put profits before people
Labor has announced that it will, if elected, implement a royal commission ‘taskforce’
Tanya Plibersek has called for the commission to be extended
The Commonwealth Bank has promised to provide a “comprehensive response” to the “confronting” interim report.
Chief executive Matt Comyn released a statement saying: “The royal commission’s interim report released today is confronting and rightly critical of our industry and our bank. We have seen too many examples of unacceptable behaviour and unacceptable customer outcomes.
“The commission has highlighted the need for significant changes, particularly to systems, processes and culture. I am committed to making sure that we learn from the failures detailed in this report to fix what went wrong and put things right for our customers.
“We have already made a number of changes and will make more to meet the community’s expectations and earn trust.
“The vast majority of our people do the right thing by their customers every day. They have also been let down.”
The chief executive of NAB has released a statement saying the bank had difficult truths to confront:
I have had the opportunity to read the summary of the royal commission interim report and will review the report in more detail over the weekend. I would like to thank the commissioner for his thoroughness and diligence.
For us at NAB, where we have made mistakes or done the wrong thing, we will own them and fix them.
It is difficult to face the statement of ‘profits before people’, but this is exactly what we need to confront. Banking was built on putting people first and earning the trust of customers. We must return to these principles once again, rather than continuing to be short term managers.
That a culture emerged which placed “greed” above customers, and that was the “driver” for much of the misconduct we have seen;
That the regulators, Asic and Apra, were too close to the sector they were meant to be policing and rarely took full advantage of their powers;
The banks accept they have much to do to win back trust;
Further legislation is on the cards;
Labor has promised to establish a task force to enforce the commission’s final findings.
There is more to come – again, the final report is not due until February, and who knows what the political situation will look like then.
There are also more hearings to be held in November, when the sector’s policies are going to be under the microscope.
Labor will continue to use the Coalition’s reluctance to hold the commission against it, while pushing for it to be extended, while the government is going to promote the changes it has already made, as well as embracing what the commission tells it.
In short, it is going to be a rough few months for the banking industry, and this is only the beginning.
We will have a review of the full 1,000-page report for you very soon, and make sure you keep checking in daily for updates as the story rolls on.
Today, Scott Morrison owes the nation an apology for standing in the way of the banking royal commission.
Twenty-six times he voted against it.
For 600 days the Liberals failed to act – at the same time as they were fighting to give the banks a $17 billion tax handout.
The release today of the Interim Report of the Royal Commission into Misconduct in Financial Services has highlighted shocking misconduct across the sector – and how disturbing it is that Morrison fought to protect the banks for so long.
The interim report asked the question about why the banking scandals happened and provided this stark and concerning response:
“Too often, the answer seems to be greed – the pursuit of short term profit at the expense of basic standards of honesty.”
And in a major criticism of the Abbott-Turnbull-Morrison government and a lack of financial regulator action:
“When misconduct was revealed, it either went unpunished or the consequences did not meet the seriousness of what had been done.”
Labor will now study the royal commission’s interim report and findings closely.
The Liberals have never taken this seriously – they were dragged kicking and screaming on this royal commission and gave it an unreasonably short timeframe. They can’t be trusted to properly act on these findings.
Today Labor is announcing we will crack down on the sickening rorts and rip offs that have been exposed through the royal commission.
If elected, a Shorten Labor government will establish a Financial Services Royal Commission Implementation Taskforce, to reform the culture of profit over people in the financial services sector.
The taskforce will be located within the Treasury and work closely with the Attorney General’s Department, and will oversee implementation of the reforms recommended by the royal commission to ensure that they are delivered swiftly and effectively.
The taskforce will consult with victims and victim groups – in recognition that they are the lived experience of the systemic misconduct in the banking sector.
Under a Shorten Labor government, Chris Bowen as treasurer will report to the parliament every six months on progress in implementation, until the recommendations are fully implemented.
The Liberals did everything they could possibly do to keep this misconduct hidden. For 600 days, they blocked a royal commission. The prime minister Scott Morrison voted against a royal commission 26 times, calling it a “reckless distraction” and a “QC’s complaints desk”.
Nobody can trust the Liberals to clean up this appalling misconduct. They always have been, and always will be, on the side of the big banks.
Labor will fight for ordinary Australians, and we are absolutely committed to cracking down on corporate crooks and misconduct in our financial services sector.
Labor called for this royal commission, Labor fought for this royal commission, Labor will establish a Financial Services Royal Commission Implementation Taskforce, and Labor will work day and night to protect Australian businesses and consumers from this appalling misconduct.
On how the employees of Australia’s banking sector would be feeling today, Anna Bligh has this to say:
Australian banks employ some 140,000 Australians and many of them I think share the disappointment of every other Australian about what they’ve done. Sometimes in their own bank, sometimes in other banks, but nevertheless they feel impacted by the damage that does to the reputation of their industry.
Ordinary Australians go to work in a bank every day. Just like everyone else, they want to be proud of what they do. They have an interest – whether these matters have occurred in their bank or someone else’s bank, they all have an interest in improving the worthiness of the Australian banking industry so every Australian can feel proud of their banks and hold them up as amongst the best in the world.
Anna Bligh says every bank needs to take the report seriously:
Every bank will need to examine this report individually for what it means for their bank but I think it’s critical that banks come together as a whole industry and also consider how to lift standards right across the industry. Not only in their own bank but working to lift standards and to standardise behaviour where that is possible.
Anna Bligh says the Australian Banking Association would be open to make its code of conduct stronger:
That’s what is delivered through the banking code of practice overseen by the ABA. If there are further matters that can be included in the code to improve it, make it stronger, that’s something we would look at taking on board.
Josh Frydenberg has released his official response:
The Liberal-National government has today welcomed the interim report of the royal commission into misconduct in the banking, Superannuation and Financial Services Industry and tabled it in parliament.
The government established the royal commission on 14 December 2017 with a broad remit to inquire into the practices of financial institutions. The government provided funding of $75 million to enable the commission to undertake its work. The commission has already held six rounds of hearings and received more than 9,000 submissions.
The interim report and the royal commission’s hearings to date make clear that some financial institutions have fallen far short of treating Australians honestly and fairly.
The government is committed to taking strong action to reform the financial sector and has continued to progress a comprehensive reform agenda to better protect consumers, ensure institutions and their executives are held to account for illegal behaviour and the financial system is safe and robust.
The government has:
established the Australian Financial Complaints Authority (AFCA) – a new one-stop shop to resolve customer complaints;
created a framework to hold banking executives accountable for their actions (Banking Executive Accountability Regime);
boosted banking and financial services competition to benefit customers; and
provided the Australian Securities and Investments Commission with an additional $70 million of funding, significant new powers and appointed deputy chair Daniel Crennan QC with a key focus on enforcement action.
There is clearly more work to be done and the government looks forward to receiving the royal commission’s final report, which is due by 1 February 2019, and acting on its recommendations.
The government thanks Commissioner Hayne and the commission for their outstanding efforts to date.
Anna Bligh says the banks have a lot of work to do.
Australian banks have a big challenge ahead of them. Their job now is to work to do everything possible to find the problems and fix them, to learn the lessons, to repay every penny and, importantly, to work to earn the trust of Australians back again. This country needs a banking system that everyone trusts. It’s critical to the economy and it’s critical to the wellbeing and happiness of every Australian. They want to be able to trust their banks and banks need to be trustworthy for them.
She says this, but the final report is not due until February, which, if Scott Morrison sticks to the plan, is just a a short throw from when the federal election is due.
Anna Bligh is now delivering her response. The former Labor Queensland premier faced some heat before stepping in as the banking sector’s spokeswoman – and it wasn’t that long into the job before she found herself defending the banks as they faced what was, by then, an inevitable royal commission into their actions:
Our banks have failed in many ways. Failed customers, failed to obey the law and failed to meet community standards.
And all of these failures are totally unacceptable.
Too many customers have been hurt and it has to stop. Too many customers – customers want to see a much better deal from their banks.
Australians have every right to expect the world’s best banks. It is clear today that as an industry we have failed to deliver that.
Make no mistake, today is a day of shame for Australia’s banks. Having lost the trust of the Australian people, we must now do whatever it takes to earn that trust back. Banks accept full responsibility for their failures and right now in every bank people are working day and night to make things right for their customers. To move from a selling culture to a service culture, there is much more work to be done in every bank.
But every bank is determined to find the problems, to fix them and to payback every penny.
All Australians need strong and stable banks, but more importantly every Australian deserves a fair and trustworthy bank.
This report is the first step to building the banks that Australians deserve. All banks will now take the time to examine the report in detail and do all that must be done to make things right.
The banks will in time be making a submission that addresses the questions in the report and providing that as requested to the royal commission.
ACTU head Sally McManus has given her take on the interim report:
The treasurer has admitted that banks have put profit before customers. He, and his government, should act to get banks out of super and protect the retirement incomes of working people.
We need to get the banks out of super. Industry funds are non-profit, run for members, and produce better returns. There is no upside to the banks for anyone other than their shareholders.
The banking sector needs urgent reform to ensure that customers and workers are treated properly and that the actions revealed by this commission are not allowed to continue.
I think he’s been a dad looking after his kids during the school holidays, actually. He’s allowed to have a week of leave. He’s a normal person with family responsibilities and I’m not really sure whether – you know, what the implication is. He’s allowed to have leave and he’s particularly allowed to be a dad every time and again. We know the toll that politics takes on family life. Good on him, good on him for actually being around.
