Anna Bligh the new CEO of the Australian Banking Association and I talk about her new role, calls for a royal commission into banking and the lack of trust by the public in banks
Anna Blight – Appointment as head of the Australian Bankers Association
Ross Greenwood: Well back to money news right around Australia as you’re aware right now there are a number of inquiries taking place that really do challenge our banking industry. The fact is banks in many cases have not covered themselves in glory but even if you get to some of the big economic problems confronting Australia. Today when it comes to interest only loans when it comes even last week to ASIC putting out actions against some of their biggest banks in regards to the appropriateness of interest. Only loans that were issued when it comes to the question of with a negative gearing should be continued. The quality and in fact the robustness of our housing markets always point directly back to our banks.
Now the fact is the banks right now are the subject of parliamentary inquires into the banking system in regards to the advice they have given in regards to the way in which they have conducted their operations. Banks in Australia have a very unique position. The big four banks make a combined profit close on $30 billion per year. Even though they employ enormous amounts of people, even though they give enormous amounts of the economic good of Australia the fact is they have also businesses that are set up to make a profit.
When you are representing the banking industry it’s pretty important to have a pretty good feel for exactly how those banks are placed and the view of the community towards them. Well, the former Queensland Premier Anna Bligh has been appointed as the head of the Australian Bankers Association. That’s something that puts in direct line with how politicians run around the country. She gave a major speech her first major speech today to the Australian Financial Review’s banking and World Summit the Chief Executive of the Australian and Bankers Association Anna Bligh is on the line right now. Many thanks to your time Anna.
Interview with Anna Bligh, CEO Australian Bankers Association
Anna Bligh: Pleasure. How are you?
Ross Greenwood: Congratulations on the job. It’s going to be a tough one I would imagine. First up can you just explain in regards to taking on these job people would want to know why as a former Premier you would want to take on a challenge such as this one.
Anna: Well, thanks for that question Ross. I happen to believe that our banking and finance industry is one of the most important industries that underpin everything else that happens not only in the broader economy and to the wealth of the nation but to the lives of individual people. In fact, it’s the fact that there is so much turmoil in it at the moment that attracted me to it. Ross, I like a challenge and there’s no doubt that this is one. I like big problems to solve and part of the role here is now at this particular moment in history is that of being a change agent. I want to make a difference and I think this is a very big place where you can pull some levers that makes a difference.
Ross Greenwood: Okay, is it important that you as a former senior liberal politician in Australia are right now inside an organization that does not want a royal commission. Are you there to try and hit off that royal commission into the banks?
Anna: Ross I haven’t been employed to make any particular links for any side of politics. The role of any industry association is to work with the government of the day elected by the Australian people whoever they may be. Of course, to work across the parliamentary divide to build links with the relevant like the shadow ministers and increasingly importantly working with people on the crossbenches and I’ll be doing all of that. Anybody who’s spent the longest time in politics as I do gets very experienced at working across political divides and finding the things where you can find common ground. I look forward to using that experience to find common ground.
Is a royal commission into strategy banking system necessary?
Ross Greenwood: Based on the research that you have done in taking on this job and since you have been in the role. Can you tell me whether you believe that a royal commission into a strategy banking system is necessary?
Anna: Well, firstly I can absolutely understand why it’s been called for, I think those who are calling for it are responding to a number of issues particularly complaints often from their own constituents and those things which we’ve all seen in the headlines. I can also understand why the government is responding to those similar same kinds of complaints with a number of parliamentary inquiries.
For example calling on the major banks CEOs to come in front of the parliamentary inquiries, my view is that the first challenge for the banks is to take on the recommendations of all of these inquiries move as quickly as they reasonably can to implement them and to do that in a way that makes sure that customers feel the difference. If they fail in that task Ross, then I think they will continue to see more scrutiny and more calls for these kinds of initiatives but right now we’ve got 17 inquiries reviews and investigations. My view is let’s get them done. Let’s see what the recommendations are. Let’s get moving on this agenda because I think Australians want to see action.
Do you trust the banks?
Ross Greenwood: Okay, in this speech you’ve made today you’ve made something that I think is a very big line called you have actually said “Australians have lost trust in banks ability to balance the interests of customers and shareholders”. Is that true do you think Australians have lost trust in those banks abilities?
Anna: Ross the ABA has done some research over the last 12 to 18 months and that research is very consistent with global research that looks at the public’s trust in institutions whether its government, media, or corporations and we’re seeing a massive decline of trust in those institutions globally. You see it here in Australia and the ABA research shows that trust is a big word and it’s got lots of components. Australians actually have a very very high degree of trust in their banks when it comes to holding their money safely and securely.
Every time you want to pay your bill online you’ve got absolute trust and confidence that that money will go out of your account to your telephone provider your telecommunications provider. Where the trust is breaking and fragile is in areas such as financial advice. When the bank advises me to do something is it putting me as the customer first or is it putting its own profits in the interests of its shareholders first? And that’s a growing question in the minds of many Australians and it’s a question which I think the banks I know that the banks want people to have confidence in that and they know they’ve got work to do to win back that confidence.
Ross Greenwood: One of the respect inside banks right now and you know these from your time inside government is the role of whistleblowers because if banks do not allow whistleblowers to come forward with misdeeds then ultimately banks might allow a fester inside themselves just as any organization political party, whatever, would allow it to occur. If you don’t allow that individual to call out wrongdoing, if it is occurring. Now it has to be genuine wrongdoing. We understand it cannot be vexatious but the fact is in many cases it seems as though the whistleblowers have been thwarted or even punished in many cases inside of large banks.
Anna: This is a critical issue you’re absolutely right. Whether it’s a bank or a government department any organization that does not encourage people to speak up when they see something wrong happening is an organization that is it’s very hard to maintain a good strong ethical culture when people are discouraged or in some cases punished for stepping up and saying “something’s wrong here”. Last year the Australian Bankers Association developed a set of guidelines for what every bank whistleblower policy should include.
The four major banks have now adopted those guidelines and are currently in the process of undertaking training with all of their staff in the new provisions which do provide for zero tolerance of retaliation against whistleblowers. They’ll be doing additional training with the senior executives with a responsibility in this area. Then the non-major banks will also be adopting new whistleblower policies and they are targeting the end of June for those new policies to be in place. This is an area where banks have heard the message very strongly that acted, I think for big institutions have acted very quickly and I would hope that we would start to see people in those organizations feel a lot more secure. Should they want to put up the hand and escalate something that they think is wrong.
Ross Greenwood: Always a big issue there is no doubt for what is, one of the most important areas of our economy right down Australia are banks, tough job there’s no doubt. The chief executive of the Australian Bankers Association the former Queensland Premier Anna Bligh we appreciate your time on the program.
Anna: Thank you very much, Ross, I’m sure we’ll talk again.
Ross Greenwood: No doubt.