After damning the Commonwealth Bank’s management, regulators want the bank to fix itself


Helen Bird, Swinburne University of Technology

A report on the Commonwealth Bank’s governance, culture and accountability has stripped away the bank’s delusion that it is well run and a model of good governance.

The report by the Australian Prudential Regulation Authority (APRA) is a damning indictment of every aspect of CBA management, from the board of directors to executive management and even the lower levels of the bank. However, APRA has done little more than rap CBA on the knuckles.

Responsibility for fixing up CBA has been turned over to the bank itself. More could have been done, including placing conditions on CBA’s banking licence and removing board members and executives.

APRA has applied a A$1 billion add-on to CBA’s minimum capital requirement. These are the financial assets that the Commonwealth Bank is required to hold to ensure a stable banking system.

APRA has also accepted an enforceable undertaking from the CBA. This is essentially an agreement under which CBA accepts the report’s findings (but does not expressly agree with them) and promises to prepare a plan to respond to its recommendations.

There are indications in the APRA report that there will be further investigations of the conduct of bank employees.

What penalties?

The A$1 billion add-on to CBA’s capital requirements is not a penalty, despite commentary to that effect. APRA can and does require top-ups of this kind from time to time under the Banking Act to ensure security and confidence in the banking sector.

Given the Commonwealth Bank’s size and leading role in the sector, the additional capital requirement is prudent but hardly controversial. The funds will be returned to CBA when it completes the actions proposed by the enforceable undertaking.

At best, the capital requirement is a temporary but not significant inconvenience for CBA. It represents a mere 0.103% of its total assets as of the last financial year

That leaves the CBA enforceable undertaking as the principal outcome from the APRA report.




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Why the new banking laws won’t be the slam dunk the government is expecting


The enforceable undertaking is mostly a procedural document. For instance, CBA must submit its remedial action plan by June 30 2018.

It must have a clear and measurable set of responses and a timetable for each response, and must nominate a person responsible from the CBA executive team. CBA must also appoint an independent reviewer, approved by APRA, to report to APRA on compliance with the enforceable undertaking and the completion of items in the plan. CBA must report separately on executive pay issues.

In essence APRA has handed over the responsibility for cleaning up the management mess found at the CBA to the bank itself, despite finding that it is culturally unfit to properly manage itself.

Why should anyone take comfort from that arrangement?

APRA’s report also makes clear that the problems at the Commonwealth Bank do not stem from one specific issue. The problems affect the whole organisation of more than 45,000 employees with A$967 billion in assets.

An independent reviewer will vet what is being done and report on its success or otherwise to APRA. But that report will be made to APRA, not to the general public. We may never know what measures the bank implements as APRA has no obligation to disclose anything.

What else could have been done?

An enforceable undertaking can save the regulator the time, cost and uncertainty of taking legal action, as well as enable it to craft specific remedial actions to fit the circumstances.

But there is very little tailoring in the Commonwealth Bank’s enforceable undertaking. APRA has opted to wait and see what remedial action the bank comes up with. The regulatory touch is so light that even describing it as featherweight would be an exaggeration.

APRA could have done much more than it did. Banks require a licence and APRA is empowered by Banking Act to place conditions on these licences that restrict or limit how banks can operate.

APRA could have used this power to place immediate restrictions on CBA’s business practices, including on the size and calculation of executive compensation. One of the major findings of APRA’s report is that CBA executive compensation schemes did not provide sufficient incentives for senior executives to account for risk in their decision-making. Certainly, the criticisms of CBA management in the APRA report are sufficient to warrant this kind of action.




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APRA and ASIC have the legal power to sack bank heads, but they need willpower


APRA has the power to remove a bank director or senior manager if the person does not meet one or more of the criteria for fitness and propriety. That APRA did not do this may be because there have already been resignations and new directors at the Commonwealth Bank.

APRA should have queried whether these changes were sufficient. Perhaps this is part of the wait-and-see approach implied in the enforceable undertaking.

The ConversationThe APRA report highlights systemic problems in Australia’s leading company and premier bank, including a culture of complacency, defensiveness, insularity and overconfidence. But for all of that, and despite the financial and emotional costs borne by the Australia community, APRA’s response appears to be no more than “wait and see”.

Helen Bird, Course Director, Master of Corporate Governance & Research Fellow, Swinburne Law School, Swinburne University of Technology

This article was originally published on The Conversation. Read the original article.

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Abbott suggests sacking bank regulators as ASIC feels the heat


Michelle Grattan, University of Canberra

Former prime minister Tony Abbott has strongly condemned the performance of financial sector regulators, suggesting they should be sacked and replaced by “less complacent” people.

With increasing attention on the apparently inadequate performance of the Australian Securities and Investments Commission (ASIC), Abbott raised the question of what the regulators had been doing as the scandals had gone on.

“We all know there are greedy people everywhere, including in the banks,” he told 2GB on Monday. “But banking is probably the most regulated sector of our economy. What were the regulators doing to allow all this to be happening?”

Abbott said his fear was “that at the end of this royal commission we will have yet another level of regulation imposed upon the banks when frankly what should happen is, I suspect, all the existing regulators should be sacked and people who are much more vigilant and much less complacent go in in their place.”

He said the analogy was, “yes, punish the criminals but if the police are turning a blind eye to the criminals, you’ve got to get rid of the police and get decent people in there”.

Meanwhile Malcolm Turnbull, speaking to reporters in Berlin, defended refusing for so long to set up a royal commission, although he said commentators were correct in saying that “politically we would have been better off setting one up earlier”.

Turnbull said that by taking the course it had the government “put consumers first”.

“The reason I didn’t proceed with a royal commission is this – I wanted to make sure that we took the steps to reform immediately and got on with the job.

“My concern was that a royal commission would go on for several years – that’s generally been the experience – and people would then say, ‘Oh you can’t reform, you can’t legislate, you’ve got to wait for the royal commissioner’s report.’

“So if we’d started a royal commission two years ago, maybe it would be finishing now and then we’d be considering the recommendations … With the benefit of hindsight and recognising you can’t live your life backwards, isn’t it better that we’ve got on with all of those reforms?”

Turnbull dismissed Bill Shorten’s call for the government to consider a compensation scheme for victims by saying this matter was already in the commission’s terms of reference.

Among the reforms it has made, the government highlights giving ASIC more power, resources and a new chair.

But Nationals backbencher senator John Williams, who has been at the forefront of calls for tougher action against wrongdoing in the financial sector, told the ABC that ASIC has got to be “quicker, they’ve got to be stronger, they’ve got to be seen as a feared regulator.

“That is not the situation at the moment,” he said.

He had sent a text message to Peter Kell, ASIC deputy chair, a couple of nights ago “and I said, mate, Australia is waiting for you to act”.

Asked how the culture within ASIC could be changed, Williams said, “I suppose you keep asking them questions at Senate estimates, keep the pressure on them, keep the message going on with the management of ASIC regularly.

“As I have said to the new boss [chair James Shipton], you’ve got to act quickly, you’ve got to be severe, you’ve got to be feared. If you’re not a feared regulator, people are going to continue to abuse the system, do the wrong thing without fear of the punishment”.

He welcomed the increased penalties announced by the government last week.

The chair of the Australian Competition and Consumer Commission (ACCC), Rod Sims, while declining to comment on ASIC, said he agreed with Williams “that you really do have to be feared. And frankly I’d like to think the ACCC is.

“I won’t comment on others but you want people to be really watching out – watch out for the ACCC, watch out that you don’t get caught because if they catch us it’s going to be really dire consequences. And I think we’ve got that mentality,” he told the ABC.

Updated at 4:30pm

The ConversationIn an interview on Sky late Monday, Finance Minister Mathias Cormann admitted, “With the benefit of hindsight, we should have gone earlier with this inquiry.” This was in stark contrast with his colleague, Minister for Financial Services, Kelly O’Dwyer, refusing to make the concession when she was repeatedly pressed in an interview on Sunday.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Video: YouTube Bandit Arrested


A not too clever YouTube bandit has been arrested for a bank robbery. Get the full story and a video on the story below.

For more visit:
http://socialtimes.com/bank-robbery-confession-youtube_b112329

USA: Georgia – Atlanta


The Not So Clever Bank Robber is Captured

The following article reports on the try hard bank robber in the USA who tried to rob a bank and failed. He returned shortly afterwards to withdraw money to pay the cab fare (his getaway car) and was arrested.

For more, visit:
http://www.neatorama.com/2012/02/29/bank-robber-gets-caught-when-he-goes-back-inside-the-bank-to-withdraw-money-for-cab-fare/

Orissa, India Christians Still Face Boycott, Forced Conversion


Hindu nationalists continue to oppress Christians in Kandhamal district, report says.

NEW DELHI, November 11 (CDN) — More than two years after losing relatives and property in anti-Christian violence, there is no sense of relief among survivors in India’s Orissa state, as many are still ostracized and pressured to “return” to Hinduism, according to a private investigation.

“Despite the state administration’s claim of normalcy,” the preliminary report of a fact-finding team states, “a state of lawlessness and utter fear and sense of insecurity” prevails among Christians of Kandhamal district, which saw a major anti-Christian bloodbath in 2008.

The team, consisting of local attorney Nicholas Barla and another identified only as Brother Marcus, along with rights activists Jugal Kishore Ranjit and Ajay Kumar Singh, visited four villages in three blocks of Kandhamal on Nov. 5.

In Bodimunda village in Tikabali, the team met a pastor who said he has been closely watched since Hindu extremists forced him to become a Hindu. The pastor, whose name the report withheld for security reasons, said he had to convert to Hinduism in 2008 “to save his old mother, who could not have escaped the violence as she was not in a position to walk.”

He is still closely watched in an effort to prevent him from returning to Christianity. While the attorneys and activists were still at the pastor’s house, a man who identified himself as from the Rashtriya Swayamsevak Sangh (RSS, India’s most influential Hindu nationalist conglomerate) came to inquire about his visitors. The pastor felt compelled to tell them that they were “bank officials.”

In the same village, Hindu nationalists have also imposed a de facto ban on any private or public vehicle to ferry Christians or their belongings, said the report.

The team met the family of a paralyzed Christian, Bamadev Pradhan, whom auto-rickshaw drivers refused to take to a hospital when he recently ran a high fever. Eventually a Christian driver took him to the only hospital in Tikabali, around eight kilometers (nearly five miles) from his village of Bodimunda, but as the Christian was driving back, some local men confiscated his vehicle.

With the help of the auto-rickshaw union, the driver (unnamed in the report) got the vehicle released after paying a fine of 1,051 (US$24) rupees and promising that he would not transport any Christians in the future.

Another Christian said area Hindus extremists prohibited Christians from procuring basic necessities.

“We are not allowed to bring housing materials or food provisions or medicines, and nor are we allowed to buy anything from local shops,” he said. “We do not have any shop of our own. Here, we are struggling to live as human beings.”

The team also met a Hindu who had to pay 5,000 rupees (US$112) to get his tractor returned to him, as he had transported housing material for the construction of the house of a Christian.

In the house of a Christian in Keredi village in Phulbani Block, the team found a picture of a Hindu god. The resident, who was not identified in the report, explained that he had to display it in order to protect his family from harm.

The team found pictures of Hindu gods also in the house of a Christian in Gandapadar village in the Minia area, Phiringia Block. A woman in the house told the team that local Hindu nationalists had given her pictures of Hindu gods for worship.

“We have kept them, as they often come to check whether we have reconverted to Christianity,” she said.

Almost all Christians the team met complained that the local administration had done little to protect them and suspected that officials colluded with area Hindu nationalists.

Released on Nov. 8, the report asserts that Christians have been barred from taking water from a government well in Dakanaju village, under G. Udayagiri police jurisdiction in Tikabali Block. The village head, Sachindra Pradhan, has promised to take action “at the earliest,” it added.

Violence in Kandhamal and some other districts of Orissa state followed the assassination of Hindu nationalist leader Swami Laxmanananda Saraswati on Aug. 23, 2008. The rampage killed over 100 people and burned 4,640 houses, 252 churches and 13 educational institutions, according to estimates by human rights groups.

The spate of attacks began a day after Saraswati’s killing when Hindu nationalist groups blamed Christians for his murder, although Maoists (extreme Marxists) active in the district claimed responsibility for it.

John Dayal, a Christian activist in Delhi, told Compass that “the apparatus of 2008 remains undisturbed.” The Hindu nationalist Bharatiya Janata Party (BJP) was part of the ruling state alliance with the regional Biju Janata Dal (BJD) party at the time of the violence. Although the BJD broke up with the BJP in 2009, blaming it for the violence, the former cannot be excused, said Dayal.

“While the BJP is mainly to be blamed, Chief Minister Naveen Patnaik is not entirely innocent,” Dayal said. “Not  just that he allowed the BJP and RSS cadres to run amok when they were part of his government, turning a blind eye to their  very visible anti-Christian activities, but he was his own home [interior] minister and cannot really shirk command responsibility for the carnage together with his BJP ministerial colleagues and senior officers.”

Kandhamal district Magistrate Krishan Kumar, who was on a tour at press time, could not be contacted for comment despite repeated attempts.

Of the 648,201 people in Kandhamal district, 117,950 are Christian, mostly Dalit (formerly “untouchables” in the caste hierarchy in Hindu societies), according to the 2001 Census. Hindus, mainly tribal people and numbering 527,757, form the majority.

Report from Compass Direct News

Buddhists in India Assault Christian Aid Worker, Friend


Assailants, still at large, abduct and threaten blind volunteer, associate and pregnant wife.

NEW DELHI, September 6 (CDN) — A visually impaired Christian and his friend accused drunken Buddhists of abducting and assaulting them last week after the blind volunteer distributed relief material in a Buddhist-majority town in a region of India devastated by recent floods.

The attackers are still at large after the assault on Wednesday (Sept .1) in the town of Leh in Jammu and Kashmir state’s Ladakh region, where flooding and landslides destroyed hundreds of houses and killed around 200 people on Aug. 6.

The attackers, identified as members of the Ladakh Buddhist Association (LBA), one of the region’s largest and most influential Non-Governmental Organizations, abducted Ram Kumar Thapa, Stanzin Chosphel and his pregnant wife Putali Sherpa because of their Christian faith and beat the men, the victims said.

Thapa, a blind music teacher in his 30s, was abducted from Mahabodhi Gate in Choglamsar area in Leh, where he was distributing relief material, at around 7 p.m. on Wednesday, according to the complaint he filed on Thursday (Sept. 2) with the Jammu and Kashmir State Human Rights Commission.

LBA members were upset that Thapa was preaching Christianity to displaced residents, according to his complaint. The Evangelical Fellowship of India Commission on Relief, a Christian relief agency, is rebuilding homes for the displaced people, mostly Buddhists, in the area.

“I was attacked physically by several unknown assailants before other witnesses nearby,” Thapa stated in the complaint. “Then these men forced me into a vehicle and continued beating me all over my body as they spoke in Ladakhi to each other.”

Thapa, from the eastern state of West Bengal, also stated that the Buddhists contemplated killing him. “They discussed whether to take my life or return to the ‘office,’” he said.

The assailants took Thapa to the office of the LBA in Soma Monastery, where a Buddhist monk was also present, and beat him again, he stated. He was then moved to a room where he could hear the voice of his friend, Chosphel, with his pregnant wife.

Chosphel, a convert from Buddhism, is from Ladakh and his wife is from Nepal. The Buddhist assailants had taken them from their house in the Skalzaling area in Leh after Thapa, under pressure from the LBA members, identified them as his associates, according to the Christian victims.

The attackers showed Thapa’s bruised and bleeding face to Chosphel to warn him against continuing as a Christian, Thapa stated. He was then taken back to the vehicle.

“They placed a gunny sack with a rope onto my lap and explained that this would be my last bed … [after] they throw me into the Indus River and see if a blind man can swim and save himself,” Thapa stated. “I became terribly afraid, since I could smell alcohol on their breath as we sat in the vehicle.”

Thapa begged that his life be spared “so I could see my wife, who must be worried since it was late now.” The kidnappers replied, “Your wife will see you when she finds your body by the river bank,” he stated.

Thapa and his wife, also visually impaired, teach and live at Mahabodhi Residential School for handicapped children.

Thapa stated that when he asked what they wanted from him, “they said I had to leave Ladakh with my family within two days or else they would kill me and my family. It was around 1 a.m. when they dropped me back to my house, bruised and trembling.”

Thapa went to the Housing Colony Police Station on Thursday (Sept. 2) and found out that Chosphel also was there to file his complaint.

Chosphel confirmed that the “office” they were taken to belonged to the LBA. In his complaint to the commission, Chosphel said that around 15 “heavily drunken” men came to abduct him and his wife in their black Bolero, a mid-size SUV.

In the courtyard of the LBA facility, the Buddhists beat Chosphel before his wife, who pleaded for them to stop and asked why they were being assaulted.

“They threatened to beat her as well if she did not keep silent,” Chosphel stated. “Then they dragged me into a room and gagged my mouth so I could not cry out as they beat me with rubber pipes and rods and fists continuously. All along they kept telling me to leave my wife and also renounce my faith in Christianity and return to Buddhism.”

The men released the couple at around 12:30 a.m. after giving them two days to leave Leh or convert to Buddhism, Chosphel stated, “or else they will chop my wife into pieces and kill me and also kill my family … who are still practicing Buddhists.”

The attackers also confiscated their mobile phones.

The victims told Compass that they were still facing a threat on their lives even after filing complaints with police.

Additional Superintendent of Police Stanzin Nurboo told Compass that no one had been arrested because the victims could not name the accused.

Chosphel and his wife, however, told Compass that they would be able to identify the attackers if they saw their faces; at press time, however, they said police had not contacted any of them to do so.

Religious conversion is a sensitive issue in Leh, which borders Pakistan and Tibet, as it is seen as an attack on its distinct religious and cultural identity.

Citing religious and cultural differences with the otherwise Muslim-majority Jammu and Kashmir state, some residents of Ladakh have been asking for union territory status for the region.

As a concession, the Ladakh region was bifurcated into Muslim-majority Kargil district and Buddhist-majority Leh district in 1979, and the Ladakh Autonomous Hill Development Council was also created in 1995 to grant some autonomy to Leh and Kargil districts.

The government of Jammu and Kashmir continues to have responsibility for maintaining law and order and is in charge of the judicial system, communications and higher education.

Of the population of 117,232, over 80 percent of the people in Leh are Buddhist. Muslims make up around 15 percent of the population, Hindus 3 percent and Christians 0.2 percent.

Report from Compass Direct News