The $240 million fine imposed on the ANZ Bank by the official corporate watchdog for misconduct on September 15 is a reminder that the banking oligopoly continues to behave badly, despite their promises to mend their ways.
The Australian Securities and Investments Commission’s (ASIC) fine was a mere tap on the wrist for a company that made an after-tax profit of more than $3.6 billion in the six months to March – a 16% increase on the previous six months.
ASIC’s excuse for the small fines is that it had difficulty establishing deliberate intent for the wrongdoing.
ANZ was fined for its handling of a $14 billion bond deal for the federal government, costing it $26 million, not refunding fees to thousands of dead customers’ families, and not responding to deceased estate inquiries within the required time frame.
While the federal government will be compensated for its losses on the bond deal, many of the small customers will not; the bank says it is unable to identify the total number of dead people to whom it charged fees between 2019 and 2023!
The 2017-2019 banking royal commission found that the four big banks monopolise the finance sector and use that monopoly power to abuse their customers and the public.
It found that banks routinely abused the most vulnerable customers including First Nations people, pensioners and deceased estates.
When misconduct was revealed, it “either went unpunished or the consequences did not meet the seriousness of what had been done” and the corporate regulator, ASIC, “rarely went to court to seek public denunciation of and punishment for misconduct”.
The royal commission even found that the banks enabled money laundering for drug syndicates and turned a blind eye to terrorism financing.
It concluded that this pattern of misbehaviour was driven by “greed – the pursuit of short-term profit at the expense of basic standards of honesty”, because, “From the executive suite to the front line, staff were measured and rewarded by reference to profit and sales”.
The heads of a few banking executives rolled afterwards, a few million dollars worth of fines were issued and the banks promised to stop misbehaving.
But, surprise, surprise, they haven’t!
This is because banks are concerned to increase the profits of shareholders at the expense of the public, including its most vulnerable customers, and the government.
The big four can get away with the most outrageous misbehaviour because of their monopoly power. They know that even if they go broke in the next financial crisis, they will be bailed out by the government.
However, banks’ greatest crimes were not put under the spotlight: its investment of public savings into destructive fossil fuel and arms industries. Their investment decisions — made in the pursuit of profit — shape and direct the economy against the common interest.
If we needed yet another warning, the recently released National Climate Risk Assessment (NCRA) has it.
The insurance wings of the banks have already raised home insurance premiums and denied insurance to many households, and the NCRA report predicts this insurance crisis will worsen. So the banks know the social cost of their criminal investment in fossil fuel expansion.
There is no lack of proof of intent in this misbehaviour.
There is also no lack of intent in the continuing large-scale job-cutting in the banking sector. ANZ is leading a new round of job cuts after sacking 3500 workers.
The number of people working in banking, insurance and other financial institutions already fell by more than 35,000 between November 2023 and August last year.
As the Finance Sector Union said on September 15, “ANZ calls this a restructure, but to workers it feels like chaos. Families are left in limbo, staff are blindsided and whole communities will feel the impact when thousands of secure jobs disappear … workers and customers are the ones paying the price for executive failure.”
The chronic bank misbehaviour will only be solved if banking is no longer allowed to be done for profit. It needs to be taken out of the hands of the capitalists and turned into a social service that looks after the public’s savings and invests in the public interest.
This is not an impractical idea.
After the end of World War II, most Japanese put their savings in the public-owned and operated Japan Post Bank, operating out of post offices. They did so because they had learned from bitter experience that the private banks could not be trusted.
Japan’s Post Bank became the largest holder of personal savings in the world and remained fully publicly owned until 2007 when a neoliberal capitalist government began to privatise it. From then on, the sort of public fleecing misconduct we see continuing in Australia, began to plague the Post Bank.
As the banking oligarchy in Australia continues its chronic bad behaviour, perhaps more people will understand that society cannot allow the finance sector to remain in the hands of the capitalists.
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