All the banks said the Banking Executive Accountability Regime has helped define management responsibility, making it easier to hold specific executives to account. Lines of accountability are also being toughened up. Liberal MP Tim Wilson chairs the House of Representatives economics committee on Thursday. Labor MP Clare O'Neil, financial services spokeswoman, forced all three CEOs to pledge to meet more aggrieved customers, to hear their stories personally. It also probed on ongoing power imbalances for example, CBA was accused of litigating too aggressively. The committee pushed the banks to also resolve legacy cases. With potential policy responses raising more questions than answers, for now it's clear the banks' trust repair job is focused on improving responses to customer complaints.Īll three CEOs said the prompt resolution of grievances is critical long delays dealing with complaints is no longer acceptable. "People who represent us, part of their job is to help us grow our business, absolutely." Alex EllinghausenĪs remuneration policies are redesigned, the focus needs to be on aligning staff around service and building long-term customer relationships, Mr Hartzer suggested. Westpac CEO Brian Hartzer on Thursday afternoon. Or as Mr Comyn put it: "The only thing worse than a profitable banking system is an unprofitable one." Indeed, Mr Elliott said banks have a responsibility to generate profits, necessary to meet capital requirements and continue to lend. The bank CEOs all recognised this week that pay policies will need to change further, but by how much more they should be oriented away from sales-based and financial metrics is a matter of significant conjecture.Īs Mr Hartzer pointed out, banks are commercial enterprises and need to encourage at least some of their staff to drive sales and make profits. Commissioner Hayne found banker incentives led to the misconduct he identified and which had been driven by greed. "We are a commercial enterprise, and we do have a responsibility to generate a profit." Alex Ellinghausen Banks need to make salesįurther reform of remuneration will also be vexed. This creates overlap and makes compliance harder, he said.įurthermore, explicit regulatory guidance is not always helpful indeed, it can create a "tick-a-box" mentality, dissuading staff from applying the commonsense judgments the sector needs more of.ĪNZ chief Shayne Elliott in Canberra on Friday. Mr Hartzer pointed to responsible lending laws: APRA polices them from the perspective of credit quality but ASIC's focus is on customers. Yet despite such challenges, these hearings, which also involved Westpac's Brian Hartzer and Commonwealth Bank's Matt Comyn on Thursday (National Australia Bank's Andrew Thorburn will appear next Friday) suggested duplication of regulatory responsibilities and a lack of coherent guidance on complying with fuzzy laws partly explains the banking malaise. "I imagine the difficulty will be taking those concepts and drafting them into some workable structure," he said. The practical challenges of creating a simpler regulatory environment, based on principles such as doing the right thing by the customer, were also identified by Mr Elliott. That's because voters will "worry that 'simplification' might become a de facto pathway to deregulation, or make the environment easier for banks, despite the royal commission", he said. Hearings on Thursday and Friday in the main committee room of Parliament House revealed to members of the House of Representatives economics committee that responding to the commissioner's recommendations next year could be more challenging than his task of uncovering the banks' misconduct in the first place.Īs committee chairman, Liberal Tim Wilson, put it during the final minutes of ANZ chief Shayne Elliott's inquisition on Friday, the interim report's call for less legal complexity and more principle-based regulation – which the banks all support – creates a dilemma for government. Three big bank CEOs came to Canberra with an unnerving message for the politicians who'll have to respond to Kenneth Hayne's plan for fixing the sector, due in February: restoring community trust in banks is going to be a long and winding road, one that will be scattered with many potholes.
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