The Leader of the Opposition, Bill Shorten, was described by government figures as reckless in his willingness to call voters to man the pitchforks against our noble bankers. That his suggestion was much more narrow than it sounded suggested that he is more cunning, controlled and conscious of the long-term effects of policy announcements than he is given credit for.

Against the idea of a royal commission was a government announcement that it would strengthen the investigative powers and resources of ASIC, the corporations cop which has never manifested any great interest in finding, let alone punishing rapacious capitalists. This was being achieved by undoing Abbott-era decisions to take money and staff.

One can argue until the cows come home about which of these two "solutions" to the whole problem of modern culture is the better, or worse. It's more a political question, in an electorate which does not much seem to like banks and bankers, than of the promotion of culture change.

But the beauty of the debate is that while the politicians, commentators and lobbyists count angels on the head of a pin one way or another, no-one (they hope) is talking about more effective general solutions. Such as standing commissions against corruption, or widespread tax avoidance and evasion, or the capture of political parties by developers, the gaming industry, lobbyists, urgers and spivs. Or even a federal level Independent Commission Against Corruption focused on misbehaviour in government. In particular, no-one is talking about solutions beyond the capacity of politicians, bureaucrats or lobbies to control.

Inquiries, standing bodies and regulatory agencies serve three obvious purposes, but their ultimate effectiveness involves a fourth consideration – whether they inspire prospective and retrospective fear in the minds of those exercising power over others. The fear that they might be called to account. Or have to explain how and why they did things.

One can see the purpose as much from an investigation into a big bushfire, Aboriginal deaths in custody, or young people who have been the victim of abuse in institutions.

An inquiry provides some focus to a political issue, and provides a platform from which wickedness can be exposed and victims of that wickedness can bear witness to how they have suffered. This is often as significant as any ultimate questions of compensation, or civil law rights or criminal law retribution.

The focus on an array of cases allows examination of whether the problem is systematic or involves only a few bad apples, as people initially against the inquiry will have claimed. It will investigate how things came to this, why people decided or acted in particular ways, and allocate at least some provisional responsibility to particular players. This is usually better done by informal investigation by commissioned experts, with only contested testimony requiring anything like public hearings or the full natural justice panoply.

Third is the need for recommendation about adjustments to existing systems to prevent such things happening again. This is not merely a matter of blame. Nor is it a matter of weighing evidence, and making conclusions on the balance of probabilities. This is why lawyer-based inquiries often fall down. The judgment required for the third function involves wisdom, philosophy, ideology, political economy and knowledge of social sciences, systems and management, as much as questions of fact or law.

Only rarely will an inquiry completely succeed. It is clear, for example, that the commission into Aboriginal deaths in custody was a failure, at least at reducing deaths. This is not necessarily because the commissioners were wrong, or impractical – indeed governments and police went out of their way to pretend to accept recommendations. But nothing much happened, and the problems are much as before, often worse, as commissioners lamented this week on the 20th anniversary of the report.

This is also largely true of reports on the Stolen Generation, of umpteen inquiries into treatment of people in welfare institutions, mental institutions, immigration concentration camps, and of the medical problems of soldiers exposed to nuclear radiation or Agent Orange.

I expect that much the same will occur of feel-good future-focused recommendations in relation to child sexual abuse and domestic violence. Everyone will nod wisely and commit themselves to change – a real change of culture and performance. There will be an employment boom in the helping professions while there are endless seminars on following up. There will be a few high-profile events, at which politicians and prominent citizens will pretend that there has been some sort of sea change of community attitudes and bureaucratic practices. A year or two later, Bureau of Statistics figures will show the nature of the problem has not changed much.

This is also usually true of inquiries after natural disasters, especially bushfires. Virtually every significant "fire event" is the subject of an inquiry, at least if there is loss of life or property. Witnesses will tell harrowing tales of their loss. Some will point the finger. Experts will dilate, sometimes tendentiously, on the care and cultivation of bushfire conditions, and the management of crisis. A few people will be sacked, usually unfairly.

All agencies in emergency management (except at Commonwealth level, which is useless, but fireproof), will be reorganised, yet again. It will be said they are being made more accountable and effective . A few years later, the next fire will reveal that not much was learnt, particularly by the politicians and the bureaucracy. A fresh inquiry will be announced, dedicated to, and promising it will really make a difference this time.

Often the call for an inquiry has been generated by scandal – such as a succession of bank rip-offs, or widespread tax evasion, open defiance of the law by business franchisees, or the making nonsense of the law by multinationals. Dealing with the problem by "strengthening" the "cops on the beat" tends to admit there has been a problem, but to be focused on preventing the problem recurring.

Organisations which have failed to do their job will always claim that this was the result of a lack of resources, or powers, and demand both. Only rarely, however, will they admit that failure has been a problem of priorities, of institutional will, of courage and of patience. ASIC has long been accused of institutional timidity, cultures of buckling to big interests, politicians and loud noises, and of being overwhelmed by the dimensions of systematic fraud. Some will justify past inaction by claiming that they were leading and pulling rather than pushing and prodding. In many modern regulatory bodies, the prevailing culture of "light touch" regulation is focused on being great friends with almost all of those being regulated and appealing to the finer feelings of leading lights in industry. Such best friends are often assiduous, but not necessarily sincere.

The government argues that giving some more resources to the cop on the block is more likely than a royal commission to deliver "justice", or at least reparation, to victims of bank bastardry.

That might be true if the fundamental problem is of outright fraud or breach of the criminal law. But a good deal of the problem, as even lobbyists now admit, is not so much criminal behaviour but ethical deficit. It involves failure to put the interests of clients first. It involves behaviour conditioned by rewards and returns, rather than results. In some cases, as with the banking foray into the financial advice and asset management industry, it involves clear conflicts of interest, inadequately managed, both in the engine room and the board room.

Ministers in the present government were only recently rationalising conduct or rules they now agree to be wrong. They were also the architects of disempowerment of the body they now want to give more money and power. Big business, and big banking, applauded the cuts, and is now nodding wisely in approving the government's very limited response.

In such circumstances, who is to declare relevant community standards? Can even an activist regulator be sure it knows where the public interest lies, or what a desirable corporate culture should be?

If outright fraud or theft is involved police ought to be involved from the start, and there should be no room for bargaining charges away. But the non-criminal ethical atrocities and cultural problems frequently belong in a wider context, one in which ASIC has been too trusting, too complacent and too scared. ASIC too needs culture change, as well as critical independent review of past failure.

Some problems go beyond the buccaneers of banking. Just what is the appropriate remuneration for a bank executive or risk-taker? Is the opinion of a former High Court judge, whether or not computer literate, on such a matter better than that of a woman in a pub, simply because he eats and drinks with businessmen, and made his fortune and his reputation at the bar by having them as clients?

And what is the reward system that accurately balances duties to shareholders, management and the community? Just what are the rights and incidents of corporate citizenship and legal personality? Do they, or should they, involve rights to privacy or to an amoral approach to the law and taxation obligations as of people with flesh and blood?

The opinion of ASIC, an ASIC or APRA or ACC investigator, or for that matter a top commercial lawyer, on such matters is not usually disinterested. Nor is it usually biased towards a generous view of what the public interest suggests. A man who has made his fortune running banks may know a lot more about banks, the general economy and how financial systems work than most of us. But his belief in how the system ought to work, or about the right balances of public and private interest, should carry no more weight in public debate than anyone else.

Handing difficult or "wicked" problems to inquiries and supposedly independent assessors can buy delay, removing an urgent and embarrassing problem from the front pages for another day. The problem is that as often as not, that later day will be as politically inconvenient, and not within one's own control. And although it is frequently observed that one should never commission an inquiry if one does not know, in advance, what the carefully chosen inquirers will conclude there is always a serious risk that the distinguished citizens will come to think that they were chosen for their independence of mind, rather than their political reliability. This is yet another good reason for not having unworldly retired judges, such as Douglas Macgregor (who accidentally shot Senator Reg Withers nearly 40 years ago) or Dyson Heydon (who shot, as intended, at Bill Shorten but missed).

Let's suppose this government came reluctantly to recognise that the Opposition was on a populist winner in wanting a regular and prolonged public flogging of all bankers. Even if it were not regarded, with some evidence, as being very attentive to big banking interests, one might imagine that it would seek to limit to the max any such inquiries, if only so as to protect general confidence in the banking system, or to protect its own ministers, and maybe so as to protect the public purse from the sort of lawyers' picnic that an unlimited inquiry can involve. Think of how John Howard drafted the terms of reference into the oil-for-arms inquiry so as to prevent any investigation of the knowledge or conduct of ministers, or of what happened in ministerial offices.

Britain is somewhat more sensible than Australia with royal commissions of inquiry. It does not usually commission them to look backwards at an event, or series of events. More often a commission is chosen to investigate a broad social problem, not necessarily one that is a matter of intense partisan welfare. A supposedly representative panel of the great and good – some retired senior public servant, an archbishop, a headmistress, a novelist, poet, botanist and TV personality – will be asked to take some time to consider the modern state of play, the directions in which society seems to be moving, and whether and how government ought to intervene to influence what is happening. In Australia, inquiries into the national estate, and into human relationships, four decades ago, were of this ilk.

So why do we hold inquiries? Sometimes, it is to find out the facts, or at least to get a quick (and, it is to be hoped, usually vainly cheap) overview of the facts. Usually it is to get politicians off the hook for their own failures. Blame-transfer can be assisted by bringing unsavoury facts to attention, creating the public climate in which the guilty will be tried and executed (preferably in that order). Just as importantly, it is to create a climate of fear among those who are tempted, in the future, to similar sorts of wickedness or ethical deficit. It is, in short, to create among them the sure and certain knowledge that the chances of being caught out, and of being bought, very publicly, to account is high. In business and politics, indeed, disgrace is usually as important a deterrent as actual prison or heavy fines or financial penalties.

A banker contemplating an ethical atrocity, if that could be imagined, would not lose much sleep worrying that at some uncertain time in the future she might be asked questions by an ASIC investigator. She might even figure that she could hold off a royal commissioner by endless legal appeal about jurisdiction and natural justice, coupled with representations around the back door to ministers looking for post-political careers. But a standing anti-corruption body, properly established, could be a quite different beast, more difficult to avoid and hardly worth the trouble of simply delaying.

Of course it would have to have a purview going beyond the misdeeds of bureaucrats and politicians in executive government. It should be just as focused on any activity which, on a large scale, threatened the revenue, the economic wellbeing of a significant number of citizens, the processes of honest government and the public interest generally. A body which could initiate its own inquiries, and which might think, say, that an open discussion of the taxation arrangements of Australia's 100 richest citizens and 100 biggest corporate groups might, just for now, be more interesting and worthwhile than an inquest into bad bankers. It's hardly surprising that Labor has as little interest in an anti-corruption body as the Coalition.