Day 403: 'Too much at stake'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 403.
Today in summary: Banking regulator APRA is opening the market to newcomers; Mathias Cormann outed as a naysayer on a government-run default superannuation fund; and ASIC once again found wanting in its regulation of the finance sector.
— Alex
Current banker panic level: 🙈🤑
Please don’t keep The Inquisition to yourself. Forward this email to your colleagues and encourage them to sign up for free here.
1. Banking regulator APRA has given startup Volt the green light to operate on a full banking licence and has also formally established a new pathway for other financial entities to become registered as authorised deposit-taking institutions.
2. Finance Minister Mathias Cormann reportedly refused to consider a proposal for a government-run default superannuation fund in deliberations before last year’s federal budget. The idea has support from Liberal ministers such as former financial services minister Kelly O’Dwyer and Tim Wilson, who chairs the economics committee in the House of Representatives. The Australian’s Michael Roddan reports:
“In its report, the Productivity Commission said the ‘biggest risk’ with a government-run option was the political risk of the fund performing badly, which could lead to calls for taxpayers to top up returns.”
3. ASIC’s reputation as feeble regulator was reinforced as news broke that a financial adviser who ran a decade-long A$4.7 million superannuation scam hasn’t and won’t face financial penalties, despite making off with the life savings of clients and being found to have engaged in a “blatant misuse of investor funds”.
Today’s burn prize: Super fund consultant Chant West head of research Ian Fryer
🔥🔥🔥
“There is too much at stake for us to take our eye off the ball.”
Fryer doesn’t want the debate over the best-in-show list to dominate the retirement savings sector and “distract us from dealing with the main problems to be fixed — too many accounts and members defaulting into poor-performing funds”.
The Commentariat
Australian Financial Review banking and finance journalist Karen Maley writes that banking execs are toey for the calm of a post-Hayne world where they can get back to making a tonne of dosh.
“Once the commotion around the final report has died down, the fervent wish of bankers around the country is for their lives to return the halcyon pre-Hayne days — where their over-riding preoccupation was how to make even more money, both for their employer and for themselves.”
This is an introductory service while we’re building a comprehensive daily paid online publication, coming soon.
We’re not here to offer opinion, simply to cut through the noise, and help you make sense of the emerging policy and market trends you need to be across. We call it pure intel. You can read more about us here.