Kenneth Hayne’s structural shake-up falls short in the banking royal commission’s final report
The royal commission makes all the right noises about wrongdoing, but misses the mark over deeper reforms.
Kenneth Hayne has laid down a comprehensive blueprint for a regulatory and cultural overhaul of the financial services sector but stopped short of the structural revolution many were expecting.
He has referred at least three cases to ASIC for potential criminal charges over the fee for no service scandal and noted the option remained to take more actions if the corporate cop recommended.
The Government has rejected calls for an overhaul of the mortgage broker regime to give consumers the power to pay fees while stopping all trailing commission.
Treasurer Josh Frydenberg has instead accepted advice from the Productivity Commission and the Murray review on competition grounds which means banks will pay the upfront fee for at least three years pending further reviews.
This is subject to how the industry responds to new requirements to comply with best interest duties on loan referrals.
Westpac was the only major financial institution which has avoided any further scrutiny in a report which included 19 separate referrals covering some 24 different civil or criminal offences.
Hayne was scathing about National Australia Bank chair Ken Henry and chief executive Andrew Thorburn saying “I am not as confident as I would wish to be that the lessons of the past have been learned.
“I was not persuaded that NAB is willing to accept the necessary responsibility for deciding for itself what is the right thing to do and then have staff act accordingly.” He added.
The criminal actions have not been cited being referred to ASIC but in the sections of the report detailing the ASIC referrals it cites evidence given by NAB, CBA and AMP.
As expected Hayne has called for a major overhaul of the regulators to install a new regulatory oversight body and more co-operation between APRA and ASIC.
Former ACCC chief Graeme Samuel will conduct the long scheduled capability review of APRA which was first scheduled three years ago.