Good afternoon, and welcome to day 550.
Today in summary: Middle managers can hold up a mirror to organisational culture, former APRA boss John Laker says; NAB has pledged A$2 billion in funding for emerging tech businesses; ASIC yesterday asked the Federal Court to slap a fine of up to A$36 million on AMP; the ABA has met mortgage brokers over concerns about financial abuse reporting; BoQ today announced the resignation of CFO Matt Baxby.
-- Alex
@AlexESampson
Current banker panic level: 🧐🤑🤑🤫☃️
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Former APRA boss John Laker, now chairman of the Banking and Finance Oath, emphasised the influence of middle managers in organisational culture in the wake of the Hayne royal commission. Speaking to the Governance Institute of Australia's governance and risk management forum in Melbourne today Laker said:
“Supervisors can’t regulate for good culture, but they can and they increasingly do hold a mirror up those institutions and seek to influence that culture.”
However, Laker cautioned that middle management could also have a negative impact on cultural change, whether it was coming from the lower or upper echelons of the organisation.
NAB has pledged A$2 billion in funding for emerging technology businesses. The bank today announced it would back Australian tech-innovators by providing loans, facilitating access to capital markets and supporting companies with transactional banking and risk management.
Meanwhile, Westpac has committed to participation in the Federal Government’s A$1 billion Business Growth Fund. NAB, which chairs the fund’s working group, has been out spruiking for other banks to join the fund. ANZ is opposed to the venture, and the CBA is still considering its participation.
SMH | AFR | The Australian
Corporate regulator ASIC yesterday asked the Federal Court to slap a fine of up to A$36 million on AMP over its failure to ensure advisers were acting in clients' best interests.
AMP Financial Planning last month admitted some culpability over cancelling existing life insurance policies and offering new insurance policies, allowing them to charge additional fees, in a practice known as “churning”.
The Australian Banking Association has met mortgage brokers over concerns about financial abuse reporting required under the new Banking Code of Practice which starts on July 1. Brokers and banks are required to identify customers who may be experiencing vulnerability. The MFAA and FBAA raised concerns brokers did not have the training or skills to identify physical or mental abuse.
“The MFAA, FBAA and the ABA are working together to ensure that the expectations on brokers are reasonable and realistic and that they have the support and resources they need to recognise the signs of potential vulnerability .”
Bank of Queensland today announced the resignation of chief financial officer Matt Baxby who has “decided to pursue other leadership opportunities”. Baxby will remain with the group until BoQ’s full year results in October. Newly appointed George Frazis starts as managing director & CEO in September.
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Today’s burn prize: Former APRA boss John Laker
“The feedback was always that they earned their money.”
When asked in a forum in Melbourne today about ASIC’s recent decision to place psychologists in company boardrooms to understand their thinking, Laker said APRA kept a close eye on similar efforts by the Dutch Central Bank when he was leading the regulator, and the feedback was enlightening.
The Commentariat
Facebook will have to jump through many regulatory hoops to get Libra over the line, writes The Australian’s technology editor Supratim Adhikari.
“Calibra will run Facebook’s crypto operations, keeping all transaction data separate from social data. However, given Facebook’s track record on user privacy and the overall dominance of the platform, that’s unlikely to placate regulators.”
Private currency system Libra will be a challenge to the big banks and monetary policy, write Chris Berg, Sinclair Davidson, and Jason Potts from the RMIT Blockchain Innovation Hub, in the AFR.
“This is no small thing. For the first time since the collapse of the Bretton Woods system there is a clear competitor to the US dollar for global dominance in the currency market. How well Australia adapts to this change will be determined over the next six months. Libra is coming in 2020. Regulatory obstruction is simply not an option.”
Boosting super would cost the budget more than it saved on age pensions, writes Grattan Institute fellow Brendan Coates.
“Whatever other arguments there are for lifting compulsory super contributions, and the Grattan Institute does not think there are many, the argument that it will safeguard the budget against the costs of ageing cannot be among them.”
Facebook’s “audacity” in launching a global currency system based on trust will clash with the big banks, writes The Australian’s senior business columnist John Durie.
“There is merit in the concept, but some practical issues exist, like trust. There’s also the fundamental question of who needs a new currency anyway.”
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