Money Minute – November 20 2017 Bank Royal Commission?

Bank Royal Commission?

Ross Greenwood: Listen, you might’ve seen the new ad-campaign justifying bank profits over the weekend.

The Big Four alone remember made $31.5 billion over the last financial year. Have a look at this –

AD: It goes to millions of everyday Australian’s who own bank shares through their super funds. Profits don’t belong to the banks, they belong to everyday Australian’s like you. Australian bank profits belong to Australians. Australian banks belong to you. They do – of course they do! Authorised by T. Pearson, Sydney.

Ross: Okay, so who is T. Pearson – what is the most important question. Well, this is tony Pearson, right here. The Executive Director of Industry Policy at the Australian Banker’s Association. So no surprise the banks are conducting a hearts and minds campaign to justify their profits – but why now?

It’s all about politics. Because inside banks, there’s a realisation that vast majority of customers actually like their banks. But as a class, they are despised and that is used by politics. Hence why Tony Pearson and Anna Bligh, the former Labor Premier of Queensland.

And there is a growing realisation that a Royal Commission into the banks might be inevitable given Bill Shorten is leading the polls.

But in actual fact, it might happen sooner rather than later because of a few quirks.

Barry O’Sullivan, Senator Barry O’Sullivan, a National, is keen to introduce a bill to parliament via the Senator.

Now, that’s unusual because bills usually go through via the House of Reps, but a precedent was created last week with the same-sex marriage bill actually going via the Senate.

Now, such a bill would have to pass the House of Reps,. But remember Malcolm Turnbull’s government is in the minority because of the resignations of Barnaby Joyce and John Alexander.

And Bob Katter – for one – is keen for an inquiry into the banks. It might just come down to George Christensen, a national who said he wants a Royal Commission but also made a promise not to vote against the Government while Barnaby is away from Parliament.

Markets

Over the weekend, the Dow Jones Index of US Shares down 100 points
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