Kerry Packer excepted, an appearance before a federal parliamentary committee demands a degree of humility – the more so if you happen to be a bank chief executive resisting calls for a royal commission into your company's financial activities. And Commonwealth and ANZ Bank CEOs Ian Narev and Shayne Elliott were dutifully contrite, even penitent, when they submitted themselves for parliamentary interrogation this week.
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Mr Elliott said that each time the ANZ fell short of what was expected, it potentially harmed a customer or a member of the community. "For that I apologise," he told the committee on Wednesday. The day before, Mr Narev apologised for the treatment of CommInsure customers whose claims had been delayed or denied on what appeared to most people to be fabricated or unethical grounds.
There were asides and revelations, however, that suggested their penitence regarding repeated financial scandals and interest rate shenanigans was not deeply felt – and certainly not so overwhelming as to have resulted in the cultural changes that critics have long been demanding of the big four banks. Mr Narev, for example, conceded that no one at CommInsure had been sacked as a result of the alleged mistreatment of customers "because we have not seen the need to do that". He warned, too, that it would be "very dangerous" for anyone to "take the view that when things are going reasonably well, people should then start to regulate profitability". As counter to public resentment against the behaviour and arrogance of the banks, it was something of an own-goal.
The banks remind their critics that while they strive for competence and integrity in their customer relations, their overriding obligation is to their shareholders. That's reasonable. So too is their desire to maximise profits and maintain world-leading returns on equity. It's true also that the Australian economy depends on the sea anchor provided by a prosperous, well-regulated banking system.
Yet it's undeniable that the banks' commitment to competence and integrity is barely discernable on occasion, and that some victims of the resultant mismanagement have been denied justice or adequate compensation. That the banks enjoy implicit taxpayer-funded subsidies estimated to be worth between $1.9 billion and $3.7 billion has sharpened the sense of public resentment.
If exceptionalism and a divine right to ever-increasing profits is to blame for much of the bastardry evident in Australian banking, the real culprit is probably inadequate regulatory oversight.
There is, even now, resistance from corporate Australia to the notion of greater financial regulation and oversight of the banks' activities. Too restrictive of entrepreneurial spirit, goes the argument. Given their generous political donations, the banks may yet forestall a royal commission. A much needed overhaul of the financial regulatory apparatus would be a better bet, but this appears remote too. However, the CEOs' behaviour in Parliament this week will probably accelerate the emergence of grievance procedures for wronged customers.
