Day 330: Remediation tribes
An introductory weekday newsletter from Schwartz Media. Counting the days since the banking royal commission was established.
Good afternoon and welcome to day 330.
Today in summary: APRA wants banks to increase their capital base in a bid to protect against future financial crises; and ANZ’s submission to the Hayne royal commission shows it’s yet to remediate hundreds of thousands of customers who are owed funds due to bank errors.
-- Charis
Current banker panic level: 😨😨
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APRA has released a discussion paper on its proposal to increase the major banks’ capital requirements. The regulator wants the banks to hold more ‘Tier 2” capital, as recommended by the 2014 Murray inquiry. The capital would need to be available for loss absorbing in the event of a crisis. APRA said while the proposed changes were expected to increase cost of funding by up to five basis points within five years, they would not be expected to have a material effect on lending rates. APRA Chairman Wayne Byers said:
“No matter how resilient financial institutions are, the possibility of failure cannot be entirely removed. Therefore, in addition to strengthening the resilience of the financial system, it is prudent to plan for the unlikely event of failure.”
ANZ’s submissions to the Hayne royal commission reveal it’s yet to compensate hundreds of thousands of customers who didn’t receive funds owing when their accounts were closed. Home loan redraw and offset customers were also affected. The bank now has a remediation “tribe” tasked with handling outstanding issues. ANZ’s confession is one of hundreds detailed in yesterdays release of submissions to the Hayne royal commission.
The Australian | The Age
Today’s burn prize: ASIC counsel
🔥🔥🔥
“I think you are exaggerating here, Mr Crutchfield. You are the model litigant. You shouldn’t use that language with me - you are not in the royal commission.”
Justice Jonathan Beach takes umbrage to Philip Crutchfield QC, counsel for ASIC, who suggested the court’s approach to challenging his arguments was an “affront”.
The Commentariat
Yesterday’s Hayne royal commission document dump made for a dramatic day for CBA, writes the AFR’s James Thomson, coming as it did on the same day as the bank’s AGM.
“The effective message to CBA's leaders was clear – your repair job has a long way to go, and the next stuff-up might be just around the corner.”
For the reading list
Measure to create L.A. public bank fails in setback for Council President Herb Wesson and advocates
Some 42% of voters supported amending the city charter to allow for the establishment of a city-owned bank.
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