28 September 2018
Media Conference – Royal Commission Interim Report
28 September 2018
ANNA BLIGH: Good afternoon. I would like to start by recognising that the interim report is a substantial and comprehensive document. I want to thank Justice Hayne and his team for their rigour, their diligence and their relentless pursuit of the truth. I want also to thank everyone who has provided evidence to the Commission. I want also to thank everyone who has provided evidence to the Commission and assisted them thus far. This report makes some shocking findings. Our banks have failed in many ways. Failed customers, failed to obey the law, and failed to meet community standards. And all of these failures are totally unacceptable. Too many customers have been hurt and it has to stop. Too many customers want- customers want to see a much better deal from their banks. Australians have every right to expect the world's best banks. It is clear today that as an industry we have failed to deliver that. Make no mistake, today is a day of shame for Australia's banks. Having lost the trust of the Australian people, we must now do whatever it takes to earn that trust back. Banks accept full responsibility for their failures, and right now in every bank people are working day and night to make things right for their customers. To move from a selling culture to a service culture, there is much more work to be done in every bank. But every bank is determined to find the problems, to fix them, and to pay back every penny. All Australians need strong and stable banks, but more importantly every Australian deserves a fair and trustworthy bank. This report is the first step to building the banks that Australians deserve. All banks will now take the time to examine the report in detail and do all that must be done to make things right. Banks will in time be making a submission that addresses the questions in the report and providing that as requested to the Royal Commission. Thank you.
QUESTION: Ms Bligh, the ABA initially was not in support of a Royal Commission. Is it embarrassing for these findings to come out today, and you to have to make those remarks you just did?
ANNA BLIGH: There is nothing in this report for banks to feel proud of. Banks understand that many things have been revealed in the Royal Commission because of the powers that a commission have- has that they did not expect. And I think every Australian, including many of those who works- work in banks, have been not only surprised by some of what has been revealed but very disappointed.
QUESTION: Do you think the directors of these banks will ever be trusted again?
ANNA BLIGH: The Australian banking- sorry. Australian banks have a big challenge ahead of them. Their job now is to work to do everything possible to find the problems and fix them, to learn the lessons, to repay every penny, and importantly, to work to earn the trust of Australians back again. This country needs a banking system that everyone trusts. It's critical to the economy and it's critical to the well-being and happiness of every Australian. They want to be able to trust their banks and banks need to be trustworthy for them.
QUESTION: What should have the ABA been doing on this?
ANNA BLIGH: I think there is questions here for every part of the system, including industry associations like the ABA. The Commission has asked literally hundreds of policy questions in this report. We will go through it in detail. Where there are lessons to be learned, we will learn them. Where there are tasks to be done, we will undertake them.
QUESTION: This is only an interim report. What's the risk do you think of the government implementing so many regulations that it actually holds back the banking system?
ANNA BLIGH: Interestingly the Commissioner has commented that in some cases it may be part of the remedy to simplify the regulations so that it is abundantly clear in a very complex system to every member of staff what their obligations are. Those are the sorts of questions that I think the industry needs to look at, banks need to comment on, the public should take a view on, and I would expect we will see regulators and the government consider.
QUESTION: And what about the risks of that though? If there's greater regulation, what's the chance that you pass on to customers ergo(*) customers facing the risk of higher costs for changes to be made?
ANNA BLIGH: As banks go through this report and consider it in every detail, we will be looking at it through the eyes of a customer and we will be certainly highlighting to the Commission where necessary if any of the proposals could have an unintended consequence for lending systems and for customers. But I think it's too early to make any assumptions about that. The report's been out for about an hour. It's a very substantial document. It's been put together with a great deal of care and rigor and thought and it deserves a thoughtful, considered response.
QUESTION: Is there a real risk of higher cost though? We just saw- the banks have all just raised their lending rates independent of the Reserve Bank; If this leads to higher regulation, then that's higher cost for customers down the track, isn't it?
ANNA BLIGH: I think it's premature at this stage, I think, to be speculating about what regulations might come out of this report. The Commissioner has invited the public, including banks, and government, and regulator, and people who have experience with their banks to make comments on their ideas. And that's what we'll be doing, and I think, as I said, it's a bit premature to speculate about what the outcome of all that might be.
QUESTION: What role does the ABA have when it comes to the behaviour of the banks?
ANNA BLIGH: Every bank will need to examine this report individually for what it means for their bank. But I think it's critical that banks come together as a whole industry and also consider how to lift standards right across the industry; not only in their own bank, but working to lift standards, and to standardised behaviour where that is possible.
QUESTION: How do you think we got to this position? I mean have banks been sort of put up on a mantle for too long? Obviously, it was a great source of strength during the GFC. What led to this sort of culture?
ANNA BLIGH: Australians have a very strong and stable banking system. What they need – and more importantly what they deserve – is a banking system that is fair, and one that they believe is trustworthy. The Commission, in this report, raises a number of questions about how the circumstances that led to this behaviour might have come about. I leave it to others to make a judgement about the Commission's conclusions in that regard.
QUESTION: Ms Bligh, you said that the system and the industry needs to change; how's the ABA going to change? What's your role in the future of the banking system in Australia?
ANNA BLIGH: The role of the Australian Banking Association is to work with all of our member banks to find the appropriate standards across- that will apply across the whole industry. Australians want to know that it doesn't matter what coloured door they go through when they go into a bank, that there are certain minimum standards that will apply, and that those standards will be something that are guaranteed to them regardless of which bank…
QUESTION: [Interrupts] But that should be the case …
ANNA BLIGH: … and that's what this delivered, through the Banking Code of Practice, overseen by the ABA. But if there are further matters that can be included in that code to improve it, to make it stronger, then that's certainly something that we would look at taking on board.
QUESTION: Do you agree that greed is at the heart of your industry?
ANNA BLIGH: I think the Commission has made some very tough, strong statements about banks today and he certainly hasn't shied away from acknowledging that the very human factor of greed may well have played a part. There are other matters that he's also considered, but there is no place for greed in the Australia banking system and lessons have to be learnt about how to put together a system and a bank in every case that is ethical, that is trustworthy, and that customers can have confidence in.
QUESTION: What about the balance of shareholders? The Australian banks are owned by Australian retail shareholders, plus overseas; they rely on profitability. How do they strike the balance between customer service, keeping costs down but also delivering for investors?
ANNA BLIGH: The Commission has looked at the need that banks have, a very legitimate need to be commercial organisations and to balance the interest and the needs of their customers and their shareholders. And it's very clear from some of the commission's report that banks have not always got that balance right. Getting the balance right between customers and shareholders is critical to a successful and trustworthy banking industry. The best way to look after the long term interest of shareholders is to make sure that you keep your customers, that you treat them well and that you're able to grow your customer base with outstanding good behaviour.
QUESTION: There's thousands of employees around Australia employed in the industry who haven't done anything wrong, who haven't ripped people off; how do you think they'd be feeling today?
ANNA BLIGH: Australian banks employ some 140,000 Australians and many of them, I think, share the disappointment of every other Australian about what they've seen – sometimes in their own bank, sometimes in other banks but nevertheless they feel impacted by the damage that does to the reputation of their industry. Ordinary Australians go to work in a bank every day and just like everyone else they want to be proud of what they do. So they have an interest. Whether these matters have occurred in their bank or someone else's bank, they all have an interest in improving the trustworthiness of the entire banking industry so that every Australian can feel proud of their banks and to hold them up as among the best in the world.
Contact: Rory Grant 0475 741 007
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