As Commissioner Kenneth Hayne delivered his final report on the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to the government last Friday, his body language suggested he was deeply unhappy with the report.
Whilst the mainstream media claims that this inquiry was tough and thorough on the banks, their recent stock rallies show that the big four banking institutions have escaped from any form of significant structural reform.
The fact that all of the recommendations put forth by Commissioner Hayne were readily accepted by the Morrison Liberal Government is evident that this report would do little to upend the status quo of banking as usual.
But why did this Royal Commission turn out to be a wet blanket?
The terms of reference are what define a royal commission. It is these guidelines that determine what areas are investigated and which avenues are pursued. When the terms of reference are limited from the start, an investigation can only achieve so much.
This Royal Commission had a long history of being voted down, however it was with the rising political demands for a banking inquiry, rumoured to have culminated in a gathering of MPs and Senators in National Senator Barry O’Sullivan’s office where a list of investigation topics was being prepared, that made the Liberals play their hand.
It was under this sweeping momentum towards a banking investigation, that the Morrison government was forced to call the Royal Banking Commission themselves, and after voting down the proposal for a royal commission into banking 26 times the Liberal Party now had the gall to claim that this Royal Commission was their idea.
With the Liberals defining the commission, they could pick and choose the terms of reference and steered the investigation in a direction that suited their political masters.
ACTU Secretary Sally McManus recently revealed the emails between Scott Morrison and the heads of the big banks. Here the heads of the banks, directly contacted the PM with advice on who should run the commission, its terms of reference, time frame and other suggestions
When those being investigated are able to influence the scope and direction of their own investigation, it is clearly a conflict of interest if not blatant corruption.
Whilst this Commission did uncover massive amounts of unethical and unscrupulous banking activity, such as fees for no service, massive amounts of mortgage fraud, inappropriate commissions, conflicts of interest and much more, these exposures of white collar crimes did little to reveal the overall injustice that is the modern private fractional reserve lending system.
In truth this Royal Commission fell well short of what will be required to spur significant reform into the banking sector, hence the term ‘wet blanket report’.
The time is now to begin the calls for a second Royal Commission into the banking sector! One with an extended timeframe and budget, extensive public hearings and a massively expanded terms of reference that includes an inquiry into the structural systems of credit creation along with alternate systems and an investigation into the failures of the government regulators and the big 4 accounting firms to hold private banking accountable.
The days where the inner workings of the banking system remained hidden in the shadows are now over. It is time that we shine a bright light on these parasites.
You can find the full report of the banking commission here: