Issues highlighted – time for solutions

Aphilosophical argument has raged for generations between those who advocate laissez-faire, light-touch regulation where the buyer must beware and those who argue that naive consumers must be protected by the state against financial sharks. The final report by the royal commission into Australia’s banking and insurance industry, overseen by Kenneth Hayne, will take months to digest, but if its recommendations are implemented it will clearly move the dial a long way towards protecting consumers from being ripped off.

The report is not as radical as some may have wanted. The big banks have not been broken up and Commissioner Hayne has not called for their directors and chief executives to go to jail. He has urged the regulators – the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority – to take a tougher line but he has largely left it to them to work out what to make of his findings.

Encouragingly, political parties have largely endorsed the report. In many cases it is a matter of closing loopholes which bank and insurance company lobbyists cynically wrote into previous attempts to even the balance between consumers and financial companies.

Commissioner Hayne has highlighted a problem, but now it is up to Parliament to show a long-term commitment to finding a solution.