Banking has become the crime made good.
It has, over the decades, achieved such standing that officials do not so much go to gaol for appalling exploitation and poor judgment, as occupy the next, highly remunerated job. Provided the bank is large enough, the tax payer’s wallet is always open to absorbing losses made privately.
Figures such as Commonwealth Bank of Australia Chairman Catherine Livingstone have found themselves explaining to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that finding clean executives in the banking sector is a task doomed to futility.
“To find an external person globally at that level who has not been involved in some regulatory event is almost impossible. And I don’t meant that as a joke.”
The Royal Commission has unearthed the rotten-to-the-core centre of banking philosophy, but some remain impervious, even above, the all-looming zeitgeist. A tactic in the employ of those executives and managers found deep in the cultural malaise is one of spreading the muck and hoping as little of it as possible sticks to them. Responsibility, in some cases, is also shifted and deferred with amoral facility.
Former head of retail banking at the CBA Comyn was ready to provide a tidily brutal illustration of this animal operation in action. Under the now customary sight of grilling by counsel for the Commission, Comyn dumped on Narev, whose job as CEO he took over from. It was the wily Iago-like Narev, claimed Comyn, who insisted that others should not advocate for customers. Pipe down, look the other way as Narev would have the final say.
The Commision hearings on November 26 further served to illustrate the galactic distance between banking official and swindled customer — with a bare note of acknowledgement about the dampening rot. National Australia Bank’s chief executive Andrew Thorburn was a picture of this.
He spoke of laying the “bait” for bank employees as part of a sales culture, an effort to “incentivise” profit-making:
“They stepped over the line. That’s their own decision. I’m not excusing that.”
Pure is Thorburn.
In a manner designed to be soothing, but laced with cynical adjustment, Thorburn claimed that
“now we’ve got a variable reward scheme where it’s annual, it’s centralised, it’s based on achieving a number of things across four or five key result areas, it’s deferred, it’s deferred for the longer term for executives.”
The trust of customers, he admitted, had not been earned; the technical and legal aspects of the transactions were obfuscating, burying bankster conduct in a dense thicket.
But even as Thorburn was being brought back to the issue as to whether the structure of remuneration at the NAB was, in fact, a source of distortion and desperation in hoodwinking customers, he would describe that:
“at the end of the year if [the staff had] done well they could get an incentive payment but that’s not what’s driving them through the year.”
It was – and here, a moan of disbelief should have been registered – "professionalism".
NAB Chairman Ken Henry was similarly guarded, wary of letting any beams of illumination to enter his view on banking operations. Of interest to senior counsel Rowena Orr QC, was the issue of “fees for no service” — a scandal of extortion and looting that has pride of place in Australia’s banking culture.
Despite a formal breach notification being made to the Australian Securities and Investments Commission (ASIC) regarding the charging of $2 million in fees of some 12,000 customers without service, internal documentation from 2015 remained moot on the issue as to whether the NAB might have broken legal regulations.
Pressed Orr: "Surely someone within your business at that point, was thinking about whether this conduct contravened the law, and, if so, how it contravened the law?”
“Yes,” came Henry’s monosyllabic delivery.
“Surely those were matters that the chief risk officer should have reported to the risk committee?”
“Perhaps,” came the deadpan response.
Not content with the air of probability, Orr did not get any clearer answer.
“I probably can’t explain it to you.”
For Henry, the vague floating of a suggestion that a breach of law had transpired was hardly anything to get worked up over. A chief risk officer need not mention potential contraventions of the law in any assessment. The practice, whether “a sensible [one] or not” would involve a referral of breaches to ASIC. A discussion between the banking staff and the body would follow.
Henry was sounding positively like former U.S. Defence Secretary Donald Rumsfeld, famed for his attempts at "mangling language" in the name of covering possible scenarios: ASIC may say, well, yes. Or it might say no. Or it might say there’s another breach we’re worried about.
A careful consideration of Henry’s approach to questioning was, as with his colleague Thorburn, to paste over possible banking culpability and accountability by shifting the assessment to a flawed ASIC:
“It has – it has typically been the case that those matters – or work on those matters has taken place after discussions with ASIC, rather than before discussions with ASIC.”
Why bother with an internal review of the foul stables if others can do that for you, even if weak in their punitive regime?
While ASIC comes out as a fangless entity (CBA executives going so far as to be embarrassed by soft penalties on their scheme denying insurance payments to ill and dying policy holders), Henry and company have done much to earn the further ire of banking customers. The grotesquery of it continues to fascinate like tattered road kill, even as the banksters seek to break free.
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