Why bank shareholders should step up and take responsibility too

Of course the banks must pay to undo the damage they have done to customers. But it shouldn’t be limited to financial damage, writes Karina Barrymore.

Australia’s big banks are under pressure.

Of course the banks must pay to undo the damage they have done. But it shouldn’t be just for financial damage.

Pain and suffering, intergenerational impacts, lost opportunities, stress and depression also need to be compensated for, and long-term help provided.

And shareholders, to be frank, it’s time you stepped up and took responsibility.

READ MORE: CBA ADMISSION ABOUT COMPENSATION

MANDATORY REPORTING OF FINANCIAL MISCONDUCT

BANKING SCANDAL DECADES IN THE MAKING

An extra levy on bank profits to cover any future or ongoing damage to customers would provide a welcome safety net.

It would also be separate to the multiple promises and unsupervised schemes so far announced by the banks to refund customers.

These self-administered redress schemes and repayment plans are aimed at returning money wrongly taken, unwinding the usury interest rates or topping up financial losses the banks caused their customers.

But they do nothing to compensate people, families and businesses for the emotional and reputational damage they have suffered.

The heat is on banks to make good for the pain they have caused.

I can imagine the push-back, hurdles and eye rolling from these internal bank schemes at people claiming emotional and ongoing lost opportunities.

However, these intangible damages need to be recognised and addressed by an independent organisation, not brushed under the carpet by in-house committees.

Let’s not forget it was the bank staff, consultants and management who initiated the rip-offs, put them into action and covered them up.

Bank employees then pursued their customers and badgered businesses to the point of bankruptcy in some cases, even though they knew they were acting unethically and in many cases illegally. They can’t be trusted. They must now show us that everything they do is correct.

A new levy, overseen by the government, witnessed by all and openly accounted for, is the only way for the public to see justice is done.

Of course, the bank lobby will resist and imply that any such levy will just be trickled down to customers, through increased fees and charges, forcing the customers to pay for their own compensation.

So let’s make this levy a little more transparent.

Let’s take the levy out of net profit. It should not be included as a business expense. Let’s take it out of the dividend pool.

As with all proceeds of crime, wrongdoers should not be allowed to benefit.

The owners of the banks need to take responsibility for this compensation and the dishonesty by their companies.

After all, bank shareholders have been benefiting from the record high profits and big dividends for years.

Naturally, it isn’t just individual investors who should lose out to pay towards the compensation levy but also institutional investors, including superannuation funds and their members.

Since they were all happy taking the dividend cheques, no questions asked, no responsibility taken, then now they must pay the consequences.

Bank shareholders, big and small, through apathy or ignorance, have been benefiting from this dirty money for years. A levy paid out of the dividend pool would be a fair solution.

Bank shareholders, time to step up.