Is the Royal Commission solving yesterday’s problems?

The Royal Commission (RC) into Misconduct in the financial industry in Australia, is doing an invaluable service to the Australian public by stripping away the facade that the largest financial institutions in Australia were operating honestly and that they were being well-policed by  world-class regulators.

However, in making recommendations to change the Australian financial regulatory system, the Royal Commission must endeavour to fight the next war, not the last one.

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Royal Commissioner – the Australian regulatory system is broken!

It’s like a Monty Python sketch – “This parrot is NOT dead – see, it’s still paying life insurance! Why would it do that if it was deceased? Who would be silly enough to sell a dead parrot life insurance?”

Justice Hayne, Commissioner of the Royal Commission (RC) into Misconduct in the Financial Industry in Australia, asked a similar question and in the commission’s Interim Report provides some to the point answers:

  • greed – “the pursuit of short-term profit at the expense of basic standards of honesty”; and
  • because they could – “when misconduct was revealed, it either went unpunished or the consequences did not meet the seriousness of what had been done”.

Continue reading “Royal Commissioner – the Australian regulatory system is broken!”