When the publication of a 1,000-page damning account of bank greed and misbehaviour results in bank shares having their best day in recent memory, you begin to wonder if the world has gone awry.
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| Kenneth Hayne |
Such was the response to the interim report of the Financial Services Royal Commission, submitted in Australia on Friday. The report, from royal commissioner Kenneth Hayne, calls banks greedy and regulators lazy, but it actually proposes nothing new.
“Passing some new law to say, again, ‘do not do that’, would add an extra layer of legal complexity to an already complex regulatory regime,” the report says. “What would that gain?”
Finger wag
In fact, it makes no real, concrete recommendations at all, but instead wags its finger at the banks for their pursuit of profits at the expense of ethics, and calls for better enforcement of existing laws.
It still has 1,000 pages summarizing testimony from wronged customers, all pretty gruesome stuff reputationally, but as the share-price movement on Friday tells us, all of this was already in the price and the banks – and their shareholders – were braced for far worse.