Day 395: 'If they are of a mind to do it'
An introductory weekday newsletter from Schwartz Media. Counting the days since the banking royal commission was established.
Good afternoon, Happy New Year, and welcome to day 395.
Today in summary: corporate crime cases headed for the Federal Court; banks arc up about proposed capital requirements; and the new banking ombudsman warns the sector to deal with complaints early, or face higher costs.
-- Charis
Current banker panic level: 😨
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The Attorney General’s department is planning to shift responsibility for prosecuting corporate criminals to the Federal Court, reports the Australian Financial Review. The move comes after the Commonwealth DPP was given A$41.6 million in additional funding over 8 years to expedite financial misconduct cases in the wake of the Hayne royal commission.
Ministers, including Treasurer Josh Frydenberg, are reportedly worried criminal cases related to financial misconduct will get bogged down in the state court system, and the public could take the view the royal commission hasn’t had serious consequences. Melbourne barrister Norman O'Bryan SC told the AFR:
"I am sure if they are of a mind to do it, it would be done very quick."
Meanwhile, 2019 is shaping up to be a litigious year for the banks, with Westpac to face ASIC and AMP to defend a civil penalty case in the first half of the year.
The four major banks are lobbying APRA over a proposal that they increase capital meet "too big to fail" requirements. The regulator wants banks to raise additional Tier II funds to comply with global rules intended to enable"bailing in" of private investors in the event of a bank failure, but NAB head of group funding Eva Zileli told the AFR:
"For Australian banks to meet the proposed amount they would become one of the largest issuers of Tier II debt globally."
Chief banking ombudsman David Locke says banks should respond quickly to matters brought by the new Australian Financial Complaints Authority (AFCA), which is facing a record number of complaints about banks following the Hayne royal commission. Locke told the AFR the longer a dispute goes on the more financial firms pay, so it made sense to deal with issues quickly.
"What has surprised and concerned me is that some of the big financial firms have been slow to increase their internal dispute resolution capabilities and to respond to matters that we're sending to them.
"That's right across the board from insurers through to banks."
Today’s burn prize: Maurice Blackburn partner Josh Mennen
🔥🔥🔥
"In a way, the blood has already been split."
Not all lawyers are convinced of the pipeline of work to come from the Hayne royal commission.
The Commentariat
The Productivity Commission’s proposed solution to Australia’s broken superannuation system would be only marginally less messy and unfair than the status quo, writes The Australian’s Alan Kohler.
“Media coverage of the report, encouraged by the government, suggested that Australians would be $500,000 better off in retirement if the PC’s recommendations were accepted, but that’s quite misleading.”
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