Day 405: 'Hayne just tip of iceberg'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 405.
Today in summary: Hayne’s impending truth bomb is the least of the insurance sector’s woes; AustralianSuper CEO says underperforming funds need to be given the boot; and Australia Post continues to fight with banks over fees for its Bank@Post service.
-- Alex
Current banker panic level: 🤨😒
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1. The Hayne royal commission is just the tip of the iceberg for the general insurance sector, according to Macquarie Wealth Management analysts. They expect probes from the ACCC’s northern Australia insurance inquiry, the ongoing Emergency Services Levy Insurance Monitor in NSW and the Treasury Laws Amendment (to boost regulator ASIC’s enforcement powers) will be the real kickers when it comes to regulatory overhaul.
2. The head of AustralianSuper – the country’s biggest superannuation fund – says poorly performing funds should be removed from the market to prevent members enduring their “systemic low returns”. CEO Ian Silk points to the fact underwhelming funds are able to continue operation as a failure of the MySuper system, designed to prevent the perpetuation of underperformance.
3. Customer-owned banking institutions say Australia Post is strong arming them into agreeing to pay what they have labelled “excessive charges” for access to Bank@Post, a service which allows customers of participating banks to do their banking at their local post offices. The charges are essentially a co-payment for the banking service, which is crucially offered across regional and remote Australia where local bank branches have diminished.
Customer Owned Banking Association chief Mike Lawrence told The Australian:
“This behaviour will have an enormous impact on Australians in regional and rural areas. If smaller institutions are forced to withdraw, customers will be forced to travel long distances to do their banking, or where that isn’t an option, have to switch banks.
“Customer-owned banking institutions are happy to pay their fair share for a service, but should not be forced to cover costs created by the big four banks.”
Today’s burn prize: Shadow treasurer Chris Bowen
🔥🔥🔥
"Australians will be very cynical at NAB making this move not only because it is out of step with the RBA, but it comes just a week out from the delivery of the banking royal commission final report to the government."
Bowen was responding to the news NAB had announced mortgage rate hikes, breaking a pledge to hold standard variable rates.
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