Day 410: 'Risks around leaks of the report'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 410.
Today in summary: The wait is over – Commissioner Hayne’s final recommendations from the banking royal commission will be released at 4.10pm on Monday; mortgage brokers warn that potential fee restructures could hurt customers; and fintech start-up Douugh is approved for operation.
-- Alex
Current banker panic level: 😳😳
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Treasurer Josh Frydenberg has announced the final report of the banking royal commission will be released on Monday at 4.10pm – three days after it is handed down to government. The release will be timed with the close of trading on the ASX, a move lambasted as “woeful” by Shadow Treasurer Chris Bowen, who last week wrote to the Coalition calling for an immediate release for the report, and who yesterday demanded the government refrain from “political games”.
Mortgage brokers and small lenders are warning against an overhaul of broker fees, following expected recommendations from the royal commission’s final report. They say drastic changes will hurt borrowers and benefit the big four banks.
Australian fintech start-up Douugh has been approved to operate as a bank, joining emerging neobanks like Volt– online only (digital and mobile) banks with no physical branches. The bank will be staffed by an artificial intelligence-based personal finance assistant known as Sophie.
Today’s burn prize: Shadow treasurer Chris Bowen
🔥🔥🔥
“Refusing to release the Royal Commission’s final report immediately would unnecessarily politicise the handling of the report and give rise to potential material market risks around leaks of all or part of the report.”
Bowen was responding to the news the Hayne royal commission final report will not be released to the public until Monday February 4, three days after it is handed down to government.
The Commentariat
Australian Financial Review banking and finance writer Karen Maley questions whether Hayne’s report will “drive the final nail” into troubled financial services company AMPs’ coffin.
“AMP has already made $290 million in provisions to pay back customers in July and had estimated running the program would cost $210 million pre-tax, though some analysts think these will need to be increased.”
The Australian’s economics editor Adam Creighton discusses the reality that Australia’s “real” source of money – the creation of cash through credit – will be unaffected by any fallout from the final Hayne report.
“The vast bulk of money in Australia and elsewhere has been created by banks, not the government or the Reserve Bank. Unfortunately the bulk of this new money has been used to purchase existing houses and apartments rather than on ventures that would improve the capacity of the economy, which has caused massive asset price inflation.”
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