The fallout of the Banking Royal Commission is set to be ringing in our ears for some time to come.
Who’d have thought that the big four banks were engaged in systemic deception, corruption and fraud?
Who could have predicted that hundreds of mortgage brokers, after creating thousands of fraudulent loan documents, were lining their own pockets with undeserved commission?
How could it be that respected senior managers inside our most trusted financial institutions — pillars of propriety and trust — would turn out to be fraudsters?
Who could have thought such a thing?
Well, the answer is most of us. And a long time ago, too.
The stories of exploitation and corruption have been around for years, but almost no one was listening.
The inescapable conclusion to the government’s fierce opposition to the Royal Commission is that they knew from the start that Australia’s banks were acting corruptly.
They understood that the regulator was having very little impact and they knew housing loans were being used as cash cows by some mortgage brokers.
It is even conceivable that both the regulator and the government knew of the fraud rife within the CBA and AMP.
And even if the government didn’t know the extent of the corruption, fraud and deception that is endemic in the sector, the inevitable question is: Why didn’t they know?
Were they asleep?
Millions of taxpayer dollars are spent annually by Federal Government regulators, and yet the admission by AMP that they had been regularly lying to ASIC came as complete surprise.
So could the problems go much deeper?
It seems likely that a bloated blister of corruption, fraud and deception is still to be uncovered.
But what happens if the Royal Commission digs even deeper? What happens if the public lose confidence?
Already some banks have announced they are tightening their lending practices to boost confidence, and this includes car and home loans.
In future, people applying for loans from our billion dollar banks will need to prove, amongst other things, that they don’t go to the footy too many times a week. Or eat Chinese takeaway. Or like smashed avocado on toast.
Those things are set to come to an end, at least for our beleaguered first-home buyers.
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Foreign investors though, who are busily buying up our factories, commercial premises and homes, are off the hook.
They pay for everything in cash anyway, so of course the banks like them.
However, the biggest argument against a housing slowdown which could be the first step in sparking a potential financial crisis, probably lies in looking at the self interest of our politicians.
As it turns out, they are some of Australia’s most aggressive property investors.
Of the 226 members of the Federal Parliament, at least 128 of them own more than one investment property. Between them, these elected 128 members of the Australian Parliament own 412 properties.
And 18 of those are members of the cabinet.
Can you imagine them acting against their own self-interest? Perhaps passing legislation which could result in the massive devaluation of their own investments, making the average home more affordable for Aussie home buyers?
It doesn’t look likely.