Banks reflect wider moral decline

Culture of greed comes from our broader society

The elephant in the room that the Hayne royal commission into banks cannot address, and nobody wants to talk about or acknowledge, is the moral decline in Australian society (“Banks enjoy Hayne bounce”, 6/2).

The perception of many people in society is that there is corruption everywhere. The Hayne report has revealed corruption in our banks, board rooms and insurance companies. When the perception of corruption everywhere takes hold, a “kill or be killed” mentality also takes hold, causing those who would not otherwise be corrupt to follow suit. This is a real problem that needs to be discussed and resolved.

Peter R. Tredenick, Paddington, Qld

Without defending or downplaying the grievous misdeeds of the banks, it’s about time we recognised that the so-called bank culture we are criticising is society’s culture.

Regardless of their level, the people who work in our banks come out of our homes, they are educated in our schools and go to our universities, they watch popular TV and films, they visit our pubs, clubs and sports venues. Do we really think that a culture of greed is bred in isolation in our banks? No doubt, it is more systematised, magnified and pushed to the extreme in financial institutions. But when the supreme lifetime achievement for increasing numbers of us is a harbour-side mansion and a couple of expensive cars, should we be surprised if the people in our banks display that outlook in spades?

Philip Temple, Larrakeyah, NT

As a retired mortgage broker, I accept some of the royal commission’s recommendations relating to mortgage broking. I agree that mortgage brokers should be required to provide loans that are in the best interest of the borrower, rather than as at present loans that are “not unsuitable”. I accept that mortgage brokers working for companies that are owned by banks may be encouraged to provide “in house” loans and that this problem should be addressed. However, the commission’s recommendation that borrowers, not lenders, pay the mortgage broker a fee for selecting and processing a loan makes no sense. If borrowers have to bear this cost themselves they are most likely to go to a bank so as to avoid the broker’s fee, in which case they will be sold one of the bank’s products, with the risk of being sold a product that is not best suited to their needs. These recommendations are too broad brush.

Richard Exham, Cottesloe, WA

In the interests of customers and shareholders, the only fair way to deal with those who are proven to have acted illegally in financial institutions is to punish them personally. That is required by considerations of justice, deterrence and rehabilitation. Fines, of course, are of limited value when the people concerned are in many cases quite wealthy. Detention at weekends might encourage those concerned to be more honest and fair during the week.

David Morrison, Springwood, NSW

In your sagacious editorial on the underlying soundness of our banks (“Politics must not eclipse banking sector reforms”, 6/2) you made reference to your economics editor, Adam Creighton. In the immediate aftermath of the Hayne report he correctly forecast yesterday’s dramatic rise in the bank’s share prices (“Investors will break out the bubbly”, 5/2). It would seem that, just like the renowned investment prowess of John Maynard Keynes, here is another economist with prescient powers. Yet he also mentioned the cost to taxpayers of our latest royal commission — more than $1 billion — a timely reminder given the profusion of such bodies. The Hayne commission, by exposing shameful, even criminal, conduct in the finance sector may have justified its cost. But are such commissions sometimes used by governments and regulators in abdication of their more direct responsibilities?

John Kidd, Auchenflower, Qld

I understand the reprehensible actions of some bankers, and deplore them, but I don't think they were always solely responsible. I heard a borrower's lament, “the bank acted shamefully by granting me an unaffordable loan”.

If the loan was clearly “unaffordable”, shouldn't the borrower have been awake to this? I mean, if a car salesman tells me I can afford an Aston Martin, do I say “sure” or do I ask him to pull the other one?

Rosemary O'Brien, Georges Hall, NSW