Tag: Deregulation

ScoMo’s big speech reveals no ideas; no agenda, mandate. – » The Australian Independent Media Network

“Animal Spirits” will be unleashed, ScoMo proclaims, in a dreary rehash of clichés, Monday . The PM copies The Donald, conflating Keynes’ phrase with consumer confidence and laissez-faire economics. Why? “Animal spirits” will roar like a lion when we release the cage of “regulatory and bureaucratic barriers to businesses.” But why so late?

The Coalition has had six years to deregulate. Yet it still can provide no detail. Nor point to any record of success. Perhaps it’s just too modest. In the news currently is Private Security Company, Paladin, awarded $423 million to garrison Manus, without having to worry about an open tender. Or there’s the $444 million quietly slipped to the Great Barrier Reef Foundation a mob of Liberal mates headed up by a former CBA chairman, Dr John M Schubert.

Then there’s Fossil-fuel Energy minister, Angus Taylor, who’s held talks with federal environment officials over an issue at the centre of an illegal land-clearing action brought by the same department against a company part-owned by him and his brother, reports Guardian Australia. We should cheer the healthy disregard for regulation and the way the government appears to back the Taylor family in its alleged quest to bend the rules to help the Taylors to a better life.

via ScoMo’s big speech reveals no ideas; no agenda, mandate. – » The Australian Independent Media Network

The Lord of the Lies: Donald Trump’s uncivil war

Anti-politics is most evident in his emphasis on deregulation. The deregulatory clock defines the Trump presidency. With other presidencies, legislation matters. With Trump, the repeal of legislation matters. It is not just the repeal of Obamacare. It is the repeal of many constraints on economic and social behaviour. The deregulation model is simple: not to make regulations more efficient, just take a sledgehammer to them.

Three revocations are illustrative. The repeal of a requirement for oil and gas companies to report methane emissions; the repeal of an executive order protecting ocean, coastal and Great Lakes waters; and the revocation of flood standards for infrastructure projects. There have been more than seventy major environmental regulation rollbacks, and there will be more. It is the same for financial deregulation. The rollbacks of the Sarbanes-Oxley and Dodd-Frank Acts are proceeding. Future risks are priced to zero; the lessons from previous crises forgotten. It is deregulation without foresight.

The irony of the Trump presidency is that he is pushing us towards self-regulation when he has never regulated himself. He has failed to honour commitments to employees, to contractors, to students, to tenants, to other taxpayers and to the truth. He has failed to regulate himself. It is failure against which we should regulate.

 

via The Lord of the Lies: Donald Trump’s uncivil war

In Bid to Save Big Oil $900M, Trump Moves to Scrap Offshore Drilling Safety Rules | Common Dreams

In Bid to Save Big Oil $900M, Trump Moves to Scrap Offshore Drilling Safety Rules

The BSEE proposes eliminating regulations that were put in place in response to the deadliest offshore drilling disaster in U.S. history
The Deepwater Horizon oil spill, found to be partially caused by lax safety regulations, killed 11 people and injured 16. (Photo: Florida Sea Grant/Flickr/cc)

The oil and gas industry is poised to save hundreds of millions of dollars over the next decade thanks to a rollback of offshore drilling safety regulations that have been proposed by the Trump administration—including the elimination of the word “safe” from one rule.

via In Bid to Save Big Oil $900M, Trump Moves to Scrap Offshore Drilling Safety Rules | Common Dreams

Media reforms to pass the Senate, clearing the way for major mergers and acquisitions

A dramatic reshaping of Australia’s media industry is imminent after plans to scrap media ownership laws received endorsement from crucial Senate crossbenchers.

Source: Media reforms to pass the Senate, clearing the way for major mergers and acquisitions

Forgery, sackings and millions in compensation: NAB under fire over financial planners. Corman Says “forget it” the government says “deregulate” millions were lost nobody arrested. The term “rogue advisors” suggests the banks were victims too but they full participated in these crimes. A recommendation for an inquiry into white collar crime was dismissed outright by the Abbott government as was increased funding of ASIC. Only 2% of financial advice licencees will be subject to ASIC surveillence.

http://media.theage.com.au/business/businessday/secret-files-expose-nab-6281323.html


Adele Ferguson examines revelations that NAB sacked financial advisers over forgery and poor ethics.

The National Australia Bank has quietly paid millions of dollars in compensation to hundreds of clients given what it considers inappropriate financial planning advice since 2009.

The bank is the latest institution to face disturbing revelations of misconduct in its financial planning division, with a Fairfax Media investigation uncovering instances of forgery, “rogue advisers” and multiple sackings inside its financial advice arm.

A cache of confidential internal documents obtained by Fairfax Media reveals that, according to NAB, 31 of its financial planners were terminated, suspended or had their resignations “ensured” due to conflicts of interest, inappropriate advice, inappropriate practices or repeated compliance breaches.

Whistleblower Jeff Morris says the government should not have ignored calls for a royal commission into financial planning.Whistleblower Jeff Morris says the government should not have ignored calls for a royal commission into financial planning. Photo: Rob Homer

That figure does not include sackings from the NAB-owned Meritum advice operation, which, according to NAB, has terminated six financial advisers in two years.

One August 2014 “advice review” document, authored by NAB’s head of wealth, Andrew Hagger, says “we have highlighted a number of other major incidents from over the past five years (some completed and some ongoing) including those related to replacement insurance advice, gearing advice, and the adequacy of resources devoted to clients complaints handling.”

The document was circulated as NAB was being  criticised and forced to pay hundreds of millions of dollars in compensation to customers in its UK arm for mis-selling of insurance products.

Illustration: Ron TandbergIllustration: Ron Tandberg

It confirms that “rogue advisers” operated within NAB Wealth, and speaks of “other major incidents” from the past five years in which some advisers forged their clients’ signatures and manipulated documents in attempts to cover up misconduct.

Investigations into three of these cases were “continuing” at the time the document was written.

Disturbingly, the document states that these instances were not detected by the bank’s internal controls, but through client complaints or queries by authorities.

The revelations, which follow the fraud and forgery scandal inside the Commonwealth Bank’s financial planning operation, will add to calls for a royal commission into the financial advice sector – a move that the Abbott government has so far refused to consider, despite a royal commission into CBA being recommended by a high-profile bipartisan Senate inquiry last year.

“One of the worst ‘captain’s calls’ of the Abbott government was to dismiss this recommendation out of hand, despite readily calling royal commissions into unions and pink batts when it suited them,” said Jeff Morris, the whistleblower who exposed the planning scandal at CBA.

He said the NAB revelations added to the case for an even more wide-ranging royal commission into financial services and white-collar crime.

Alan Kirkland, the boss of consumer advocacy group Choice, said on Friday that Australia’s financial planning industry was “dangerous” and read like a scandal rap sheet. “CBA, Storm Financial, Great Southern, Westpoint, Fincorp, Trio, Timbercorp – which makes it even more alarming that less than 2 per cent of financial advice licensees will be subject to proactive surveillance by ASIC,” he said. He called on the government to boost the spending of the Australian Securities and Investments Commission to better monitor dangerous industries.

The NAB documents were provided to Fairfax Media by a concerned internal bank whistleblower, who was not willing to trust NAB’s whistleblower protection policies.

The whistleblower has told Fairfax Media of a volatile, toxic and Machiavellian culture within NAB Wealth. “I’m providing this information because a lot of us are frustrated with the ‘motherhood’ statements and lack of commitment by management to take these issues seriously,” the whistleblower said.

Mr Hagger told Fairfax Media that the bank had paid between $10 million and $15 million in compensation to 750 customers for inappropriate advice since 2009.

When asked whether every client of advisers NAB had sacked, suspended or forced to “resign” had been offered a review of their files, and compensation if warranted, Mr Hagger said clients were contacted on a case-by-case basis.

“Where we believe it’s appropriate to advise customers we have done so,” he said. “In many cases we’ve written to customers and have offered them an advice review … in some cases that has also led to compensation.”

He said NAB Wealth did not have “systemic issues” but “we do have individual cases” of poor advice within its network of 1700 advisers. He said NAB Wealth had a “proud track record” and had “very high industry standing”.

ASIC declined to comment on the specific issues raised in the NAB documents.

But it said it had a project under way focusing on the advice conduct of the four big banks, AMP and Macquarie Group. “We have significant work under way targeting those entities,” a spokesman said. “This includes work that covers NAB Wealth’s business. We cannot comment further on this work at this point in time.

“ASIC will expand its regulatory work on NAB’s financial planning and wealth management businesses to consider any additional issues that are brought to its attention and we urge Fairfax Media to share with ASIC any material it has, which might be relevant to our work involving NAB Wealth.”

Bankers dishonest by training, not by nature, Swiss study finds: The World Today By Nick Grimm

Leonardo DiCaprio in Wolf of Wall Street

A Swiss study has set out to establish once and for all whether bankers are scheming, untrustworthy scoundrels.

The study of more than 200 international bankers put their honesty to the test and found them to be fundamentally decent human beings, until they were reminded about what they did for a living.

At that point, the research team discovered they began cheating on their tests.

Interestingly, that result was not replicated when sample groups from other professions were asked to complete similar tests.

Behavioural economists Alain Cohn, Ernst Fehr and Michel André Maréchal laid out their findings in a report entitled Business Culture and Dishonesty in the Banking Industry.

In the wake of a series of finance industry scandals, the team set out to test the bankers’ honesty with a simple coin-tossing test.

“They were asked to flip a coin 10 times and to self-report the outcomes of the coin flip,” Mr Cohn explained to The World Today.

“Their behaviour in the coin tossing task is a measure of their dishonest behaviour.”

In order to test that behaviour, the researchers also gave the bankers a financial incentive to lie about their results.

“They could cheat to increase their earnings,” Mr Cohn said.

“For example, in the first coin flip they knew that heads would give them $US20 and so, because they knew that heads would give them a good outcome, they could easily cheat and hide behind chance.”

But the researchers knew that, given half a chance, the promise of easy money could result in many non-bankers cheating on their results as well.

So, to refine their methodology, they first split their cohort of bankers into two groups.

Mr Cohn said the first control group was tested after being asked a series of questions unrelated to their occupation, for example “questions about tea consumption or favourite leisure activities”.

The second experimental group was asked a series of questions about their careers.

“In the experimental group we manipulated the saliency of participants’ occupation and role as a bank employee by asking a few questions about their professional background,” he said.

“So for example, we asked them what banks they worked for or how many years of professional experience they have.”

Bankers started cheating when reminded of their job

When the two groups were then asked to perform the coin-flipping task, the results were revealing.

The bankers who had been primed to think about their jobs were more likely to cheat than those whose minds were still occupied with thoughts about their homes and families.

The results suggest bankers are not inherently dishonest.

“They were very honest in the control condition,” Mr Cohn said.

“[It was] only when we rendered their professional role more salient [that] they began to cheat.”

It was a technique used by researchers previously with another segment of society suffering reputational problems, according to co-author Mr Maréchal.

“Everything actually started with an opportunity to conduct an experiment on cheating with inmates at a maximum security prison,” he said.

“The inmates cheated more when they were reminded of the fact that they were criminals. So we used a similar approach in this study to examine the business culture in the banking industry.”

‘Unwritten rules’ of industry promote dishonesty

When the researchers sampled a range of non-bankers – those employed in manufacturing, telecommunications and the pharmaceutical industries – they found no variation between control and experimental groups.

“We ran the same experiment with professionals from other occupations or in other industries,” Mr Cohn pointed out.

“We didn’t find any difference between the control and the experimental group, so this implies that there is something specific in the banking industry that promotes dishonest behaviour.

“It’s about unwritten rules of behaviour in the financial services industry that encourage or maybe tolerate dishonest behaviours.”

The research makes for uncomfortable reading for bankers, but the study received support from those inside the finance industry, conscious that recent scandals reflect a serious problem with banking culture.

One international bank allowed 128 of its staff to take part in the research on condition of anonymity. Another 80 participants were drawn from a range of other banks.

So if there is a genuine will to change the culture of banking, what can be done to encourage more scrupulous behaviour?

The researchers said the payment of bonuses for those generating high profits first needed to be closely scrutinised.

“It shouldn’t be that financial incentives reward employees for dishonest behaviour,” Mr Cohn said.

He also questioned the efficacy of forcing bank staff to sit through honesty training courses.

“If the ethics training remains in the abstract, it will not help much. Just pledging integrity is not enough. We think you have to exactly name and be very concrete about the behaviour deemed desirable.”

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