by Dr. Andrew D. Schmulow
The Conversation, (2016), published electronically.
Banks are worried. Their employees have engaged in practices that they don’t want aired, so they’re pushing back, writes the UWA’s Andrew Schmulow (via The Conversation).
THERE ARE cultural and ethical malpractices prevalent in Australian banks which our regulations do not address and which our regulators have struggled to contain. Those malpractices appear to be spreading, and our banks have failed to act meaningfully. The potential effects can be dire, so we need to find solutions. The Financial System Inquiry failed to address the problem. A royal commission would.
It’s important to remember how the global financial crisis started out. It began with the subprime disaster: a large industry developed around writing dodgy loans, sold using pressurecooker predatory lending, by unscrupulous lenders — none more so than Bank of America’s Countrywide Financial.
When that was not enough, banks, including Bank of America, engaged in document fraud on an industrial scale (something CommInsure employees dabbled in too).
The point is, dodgy dealings and an unethical culture in the banking system can create catastrophic, national and international problems.