I guess we can all thank god that ASIC and APRA don’t regulate the aviation industry. Because if they did, there would be planes falling from the sky.
The Banking Royal Commission is slowly shifting from becoming a serious one-off investigation into misconduct within the financial services sector to nothing short of a pork comedy.
The key problem with this commission is that it is merely shedding light on what we already know. That there is systemic misconduct thriving within the financial services sector. All of which could have easily been thwarted by our regulators over the years. But no, the regulators, such as ASIC and APRA appear to be captured by the very institutions they regulate. This is 90% of the problem, but not even the Royal Commission wants to go near.
When investigating misconduct within the financial services sector, it will be impossible for the Hayne Commission to come to a reasonable conclusion on why such acts of systemic misconduct have taken place without putting our financial regulators under the most intense of scrutiny. Because there are a few key questions that need to be asked. Particularly the issue of why do the regulators only appear to investigate allegations of misconduct that are reported to the regulators by the very institutions that commit the misconduct, but not when general members of the public make allegations.
We Australian’s are a more often a remarkably tolerant population, but with the laws bound upon us, we know the lines in the sand and endeavour not to cross the lines. Why? Because we know if we do something like park illegally, drink drive, deal drugs, or rob a bank that there are enforcement officers ready to impose strict penalties, or prevent the crime from happening in the first place.
But for the major banks and other major financial institutions, their cops are ASIC and APRA, whom have allowed the financial services industry to commit crimes against individuals with no legal recourse. Only now is the broader society coming to the shocking reality that these regulators don’t properly enforce the laws they are bound to uphold, indeed impose stiff penalties. This is a big problem that many in Australia’s elite ‘little boys club’ of politicians and regulators didn’t want the public to find out. Hence they went to extraordinary lengths to avoid a Royal Commission altogether.
Should the Hayne Commission dive deeper into the root cause of why so much misconduct in the Australian financial services industry exists, it will have no alternative but to tackle the key issue of regulatory capture and have the regulators answer some serious questions that will no doubt lead to an unfortunate aha moment. One thing we know from previous instances of systemic misconduct across a financial system (Lets use the American or Irish examples prior to the GFC) is that no matter what allegation of misconduct is made from members of the general public to ASIC or APRA, these regulators do not investigate the matter. The end result always seems to end up with the masses unfortunately seeing their net-worth wiped off the map due to the systemic failure of regulators to enforce the law.
Financial regulators turning an early blind-eye to illegal conduct has always been the nucleus of systemic misconduct. Hence we must ask who are the accountable individuals that are employed at the ASIC and APRA that have not only turned a blind-eye, but allowed misconduct within the financial services industry to thrive. Because the sooner those folks are sacked and replaced by individuals who actually give a damn, the sooner the Australian public and banks can start to rebuild trust with one another.