Day 555: 'Hectored by Hayne'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 555.
Today in summary: IOOF’s new chief promises to “uplift” the troubled wealth manager’s governance, APRA stays the course on how it expects banks to manage information security risk; and while everyone awaits APRA’s new bible on banker pay, Australia is shamed by the Financial Stability Board for ignoring its recommendations on pay governance.
-- Alex
@AlexESampson
Current banker panic level: 😰😩😳
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Embattled super fund manager IOOF has announced Renato Mota will become permanent chief executive after a period as acting CEO. Andrew Bloore has been appointed as an Independent Non-Executive Director.
IOOF chair Allan Griffiths said the appointment of Mota as CEO marked a new era for the business. Mota said he would help with “uplifting” the company’s governance and help restore trust with the community. As part of this process Mota said he had begun a review of IOOF’s senior management.
The Australian | AFR | SMH
Prudential regulator APRA has finalised its 8-week consultation period and delivered its updated guidance for banks managing information security risks. The sector must now comply with the new Prudential Practice Guide CPG 234, which comes into force on July 1.
Two groups queried whether they should have to assess the information security capability of third parties they worked with if they were already regulated by APRA or another regulator. APRA disagreed and said it expected them to assess the information security capability of all third parties that managed information assets on its behalf.
Australia has been ranked last in an international review of the oversight of banker pay. The Financial Stability Board released a progress report on the implementation of its standards for sound compensation practices last week.
The report received little local attention at the time, however the AFR today reported Australia was dead last in a study of 20 peer nations, meaning few banks were following the FSB’s governance recommendations. The poor ranking comes as APRA prepares to release its update to executive pay standards following a recommendation from the Hayne royal commission.
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Today’s burn prize: Shadow Treasurer Jim Chalmers
“The incompetence of the government also means the Reserve Bank has far too much work to do.”
Chalmers used his first speech to the National Press Club since becoming shadow treasurer to call out the Coalition on its management of the economy. He said the RBA wouldn’t have needed to cut rates if the government was doing a better job. “Rate cuts aren’t the only tool to stimulate growth,” he said.
The Commentariat
A super fee cut is the right ambition, writes SMH chief political correspondent David Crowe.
“A decade ago, Nick Sherry was the minister responsible for super in Kevin Rudd's government. He warned that fees were too high and that trailing commissions – those costs you might continue to pay for investment advice you arranged years ago – should be scaled back.”
ANZ is complaining it is too hard to lend, writes business correspondent Richard Gluyas in The Australian.
“At ANZ Bank, more and more customers are complaining about knock-backs, according to chief executive Shayne Elliott. After being hectored by Hayne for abusing responsible lending obligations and loading up customers with unsustainable debt loads, Elliott says the industry pendulum has swung too far the other way as banks step back from providing credit to some parts of the community.”
AMP's share price is plumbing record lows as investors fret about the huge uncertainties confronting the embattled wealth management giant, writes AFR columnist Karen Maley.
“Investors are anxious that the boost to earnings from a rising share market will fail to compensate for the loss of income AMP has suffered as people rush to withdraw their superannuation savings after the Hayne royal commission revealed systemic misconduct at the wealth manager.”
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