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Analysis and Comment (89)

Conflicts abound in Australia’s financial system. Conflicts abound in Australia’s financial system. Dan Peled/AAP

Three financial system flaws David Murray can’t ignore

At the current frequency of financial system inquiries (Campbell 1982, Wallis 1997, Murray 2014) there will not be another until 2030. That makes this week’s interim report from David Murray all the more…
Could Bitcoin turn banking on its head? Could Bitcoin turn banking on its head? Elentari86/Flickr

Banking’s huge profits almost ready for the taking

Australia’s big four banks are the most profitable in the world. Last year they made A$27 billion in profit, up 9.5% on the previous year. Tech leaders in Australia say the financial industry is ripe for…
Revelations of secret Trade in Services Agreement talks have brought them from the shadows. Revelations of secret Trade in Services Agreement talks have brought them from the shadows. Image sourced from www.shutterstock.com

Wikileaks brings much-needed scrutiny to secret trade talks

Wikileaks has shone the light yet again on behind-the-scenes manoeuvres by a core of governments seeking to advance a free market agenda in the guise of “trade”. The leaked text on financial services is…
Further global deregulation of banking might present future opportunities. Further global deregulation of banking might present future opportunities. Image sourced from www.shutterstock.com

Why we needn’t fear the end of the Four Pillars policy

Revelations by whistleblower organisation Wikileaks of secret global negotiations to further deregulate global financial services, has led to speculation that such pact could signal the end of Australia’s…
I sent a friend request so I’m pretty sure this is OK. I sent a friend request so I’m pretty sure this is OK. mattiasjajaja

Nothing is private once Facebook gets into your wallet

Facebook has been on a shopping spree in 2014. It’s looking to buy a drone company so it can bring the internet and Facebook to the remaining 6 billion people on Earth who aren’t already using it, and…
An increasing number of consumers choose a broker over going direct to a bank for their home loan. An increasing number of consumers choose a broker over going direct to a bank for their home loan. Dan Peled/AAP

Looking for a home loan? Choose from one of these four options…

Over 40% of mortgages in Australia are sold by mortgage brokers, not by their manufacturers - an issue that has the CEO of Australia’s fifth largest bank, Suncorp, arguing the sector is skewed towards…
The Reserve Bank’s mandate is much broader than that of prudential regulator, APRA. The Reserve Bank’s mandate is much broader than that of prudential regulator, APRA. ArchivesACT/Flickr

The case for the Reserve Bank to swallow APRA

One of the major recommendations made by the 1997 Wallis Inquiry into banking was to establish a prudential regulator for the financial sector separate from the Reserve Bank of Australia. The new regulator…
The last word is still accurate, at least. The last word is still accurate, at least. EPA

Now Co-op is just another bank, it’s time to ditch the name

Just when members of the Co-op thought the group’s increasingly farcical situation was coming to an end, it was revealed that the bank had overlooked £400m in fines for mis-selling payment protection insurance…
Banks are asking former CBA chief David Murray, now heading the Financial Systems Inquiry, to consider tax breaks on interest income. Banks are asking former CBA chief David Murray, now heading the Financial Systems Inquiry, to consider tax breaks on interest income. AAP/Dean Lewins

Banks want you to pay less tax on interest, but why?

Australia’s big banks want the government to give their customers tax breaks on interest income, having told the Financial Systems Inquiry it would encourage more savings. In turn, the banks will have…
Hitting a brick wall? Hitting a brick wall? lydia_shiningbrightly

Flaws in our thinking mean banks can do without our trust

The ongoing global financial crisis (because we’re not out of it yet, are we?) is often characterised as a crisis of trust. Distrust of the banks was a major theme – but distrust extended also to credit…
Here lies the career of Euan Sutherland, CEO of Co-operative group April 2013 to March 2014. Here lies the career of Euan Sutherland, CEO of Co-operative group April 2013 to March 2014. Chrisinplymouth

Euan Sutherland’s attempt to seize the soul of the Co-op has ended in revolt

The shocking and rapid resignation of Euan Sutherland, the chief executive of the Co-operative Group, shines a light on the clash of cultures being played out at the top of this organisation. Sutherland…
Correcting Eire: the Irish state is serious about modernising. Correcting Eire: the Irish state is serious about modernising. William Murphy/Flickr

Ireland’s post-crash reforms promise more than just recovery

The Republic of Ireland’s calamitous recent years of financial crisis and government dysfunction look to be coming to an end, with an economic recovery gathering pace and a new administration that seems…
Tunisia has its dangers, but it should be safe from financial collapse. Tunisia has its dangers, but it should be safe from financial collapse. archer10

How banks can help the move from dictatorship to democracy

Tunisia has been hailed as a lone success story among the Arab Spring nations. A relatively peaceful transition with a recent agreement on a new constitution has enabled the country to avoid the bloodshed…
Fight or flight? Bankers likely to opt for the second. Fight or flight? Bankers likely to opt for the second. BK and EP

Fear of risk linked to high stress hormone in bankers

In times of financial uncertainty and crisis, high stress reactions lead to traders becoming more risk averse, which drives pessimism and further falls in finance, according to a new study. This is because…
The big four banks, ANZ, CommBank, NAB and Westpac, are not legally prevented from merging, but the four pillars policy has stood in the way. The big four banks, ANZ, CommBank, NAB and Westpac, are not legally prevented from merging, but the four pillars policy has stood in the way. xcode/Flickr

Four pillars or four pillows? Banking’s comfy collective

Australia’s four pillars policy is widely misunderstood. At heart, it is an anti-bank policy, one which prohibits the large banks from doing what they might like to do and that is to merge. It stops them…
It’s hard to keep track of all this currency. It’s hard to keep track of all this currency. epSos.de

Changing traders and tech won’t stop currency rigging

Authorities in New York have announced they are launching an investigation into the manipulation of the world’s biggest financial market – the US$5.3 trillion a day traded in currencies. New York regulators…
Scrooge McDuck: a classic case of wealth addiction. Scrooge McDuck: a classic case of wealth addiction. Carl Barks/Disney

Bonus obsession makes bankers miserable

News that many of the large banks will continue to pay large bonuses has sparked off another round of public anger. Even the beleaguered RBS hopes to offer some of its top bankers bonuses worth 200% of…
Visionary at work? Visionary at work? John Stillwell/PA

Ed Miliband banking speech is incomplete, but encouraging

Ed Miliband’s heavily-trailed speech on banking reform was no political game-changer; however, it broadened and deepened his One Nation theme and set out specific policy proposals to help restore Labour’s…
The shoulder pads are gone but the IT infrastructure remains. The shoulder pads are gone but the IT infrastructure remains. Phagan photos

Ancient IT makes a banking meltdown inevitable

A KPMG report warned last year that the next systemic shock to UK banking could come from an as yet unforeseen event, such as a massive payment outage or a cyber attack. Since the IT systems in most banks…
This is your brain on capitalism: the city is addicted to risk, drugs and overwork. This is your brain on capitalism: the city is addicted to risk, drugs and overwork. Willard

Drugs and the city: an open secret, so why no testing?

When the chairman of the ethical Co-operative Bank was recently caught on camera purchasing drugs, it became a major news story. But the links between drug-taking and Wall Street or the City of London…
Where now for European banks? Where now for European banks? MPD01605

This is how the EU can fix its failed banks

The EU has made progress on the construction of a banking union, by agreeing on common rules for dealing with failed banks. The downside is that these rules won’t kick in until 2015: the Eurozone faces…
But what can bankers teach birds? But what can bankers teach birds? iwinatcookie

Birds, bees, and banks: lessons from collapsing ecosystems

Figuring out why financial crises emerge in seemingly stable economies is tough. Widespread collapses are notoriously difficult to predict - to do so requires a comprehensive view of a complex, interconnected…
Small changes to currency can have a big impact. Small changes to currency can have a big impact. @Doug88888

If foreign exchange markets are rigged, the solution is simple

In the latest big scandal to hit the banking sector, regulators around the world are investigating whether foreign exchange markets have been rigged. At least seven major banks have been caught up in the…
Bank of Melbourne relaunched its new look branch network in 2011 as part of a broader push to build customer relationships. Bank of Melbourne relaunched its new look branch network in 2011 as part of a broader push to build customer relationships. Joe Castro/AAP

Barclays is closing branches, but Aussie banks slow to follow

UK banking giant Barclays has revealed plans to lay off 1700 branch staff and shrink its branch network as customers embrace online and mobile banking. The street faces of banks are changing quickly. Where…
Sgt Barclays reporting for duty. Sgt Barclays reporting for duty. Dunechaser

It is vital that our banks score well in cyber war games

A war gaming exercise began in London recently to test financial institutions' effectiveness against a range of simulated attacks from cyberspace. It was called Waking Shark II, which sounds very exciting…
It’s easier than ever to switch. It’s easier than ever to switch. Arne Hückelheim

New banks fight giants, but public still not switching

The banking sector in the UK, always dynamic, continues to flex and morph. Newer, smaller banks are growing, desperate to break into a market dominated by a small number of big players. However, despite…
A long way from Wall St. A long way from Wall St. Jairo Londono

Explainer: how does Islamic finance work?

At the World Islamic Economic Forum in London, David Cameron has announced the UK is to become the first non-Muslim country to issue Shariah-compliant bonds and that a special Islamic index will be created…
Dance with the devil and the devil don’t change: he changes you. Dance with the devil and the devil don’t change: he changes you. HowardLake

Co-op’s latest blunder spells the end for ethical banking

The Co-operative Bank is no longer. What was once an experiment in working class self-help has become the latest victim of rapid changes sweeping the financial sector. It seems unlikely that the ethical…
What does a shilling get me? What does a shilling get me? epSos.de

Bankers have no reason not to fix currency rates

This week it was revealed that the UK’s Financial Conduct Authority (FCA) is investigating allegations that London-based currency traders in large financial institutions were manipulating exchange rates…
I say, look at the size of this larder. I say, look at the size of this larder. Oli Scarff/PA

Help to Buy is a problem for UK banks, by default

Mortgage rates for the government’s Help to Buy scheme were announced yesterday amid the usual torrent of criticism for a policy that has very few friends. One Daily Telegraph commentator deemed the policy…
Coles is believed to have applied for an Authorised Deposit-taking Institution licence, which would allow it to take deposits. Coles is believed to have applied for an Authorised Deposit-taking Institution licence, which would allow it to take deposits. AAP

Mortgage price check in aisle four as Coles banks on future

The news that Coles may be seeking a banking licence would, if confirmed, put the supermarket group and its parent company Wesfarmers in direct competition with Australia’s major banks. It would allow…
A banking crash killed the Wall St bull market. A banking crash killed the Wall St bull market. Robin Stevens

Banking’s future depends on learning lessons from the past

A bank in trouble negotiates with its regulatory authorities and other banks for support, but is refused a bail out and closes abruptly, sparking a global contraction as its obligations are left unhonoured…
Janet Yellen: leader or follower? Janet Yellen: leader or follower? IMF

It doesn’t really matter who chairs the Federal Reserve

The surprising news that Larry Summers has withdrawn his bid to become the next chair of the US Federal Reserve has opened up the big question of who should lead America’s central bank. The new front runner…
Parliament in the early 1800s: good at resolving banking crises. Parliament in the early 1800s: good at resolving banking crises.

Response to past crises shames post-Lehman dithering

The fifth anniversary of Lehman Brothers’ demise is an opportune moment to take stock and contextualise what has happened since. And one good way to do so is to compare this government’s policy response…
Investment bank for sale, no careful owners. Investment bank for sale, no careful owners. John Stillwell/PA

Banking’s Lehman lesson is that change must be cultural

This weekend will see the 5th anniversary of the collapse of Lehman Brothers, an event that tipped the world into economic crisis and shoved banking into the spotlight. The critical state of the world’s…
Taking banking back to its foundations. Taking banking back to its foundations. orangeacid

Reborn TSB evokes memories of another banking era

After an absence of 18 years, TSB banks reappeared on the British high street this week. Though much of the initial commentary focused on the new bank’s opening day website crash, a more interesting question…
Sailing through troubled waters. Sailing through troubled waters. Chris Ison/PA

‘Window dressing’ will not restore JPMorgan’s image

Another week, another banking scandal. In the past few years we have seen what appears to be an endless line-up of banks behaving badly. They have engaged in rate manipulation, rogue trading, product mis-selling…
That’s one expensive cetacean. That’s one expensive cetacean. wwfunitedkingdom

A whale of a time: how traders cost JP Morgan billions

As long as there have been financial markets, there have been serious financial losses. But the traders of today have shown a talent for blowing billions. During the most recent round of financial misadventures…
Goodbye Wonga, hello credit co-ops? Goodbye Wonga, hello credit co-ops? Catholic Church (England and Wales)

Welby’s Wonga wobble as he takes on the financial sector

The Archbishop of Canterbury, Justin Welby, has become increasingly involved in debates about the UK financial sector. The embarrassing revelations that the Church has invested indirectly in payday lender…
The market power of banks in funding will be challenged by the rise of super funds. The market power of banks in funding will be challenged by the rise of super funds. Image from www.shutterstock.com

Rise of super funds will shape Australia’s financial sector

How will the shape of Australia’s financial sector evolve over the coming decades? How will the demand for finance change? Where will the supply of funds come from? Can we be confident that available funds…
Taking on water is the last thing a sinking vessel needs. Taking on water is the last thing a sinking vessel needs. amirjina

Bail ins are the new bail outs, but they won’t save banking

Bailing out banks is so 2008. It seems 2013 is the year of the bank “bail in”. It started with the Co-operative Bank in the UK, when the bank’s management decided to “bail in” some of its bond holders…
Tough times in the zone: the euro is holding out for a hero. Tough times in the zone: the euro is holding out for a hero. Rock Cohen/Flickr

The European banking union as a matter of equality

Academics, politicians, international economists and central bankers alike talk and talk about the theoretical benefits of a European banking union. But these reflections go far beyond the current, real…
Welcome to London. Now would you mind fixing the economy? Welcome to London. Now would you mind fixing the economy? Alastair Grant/PA Wire

Here’s Carney: what to expect of Canada’s superstar banker

Like many Canadians to achieve high office in his country over the past half-century, Mark Carney came from an ordinary, middle-class background. And like his two immediate predecessors as governor of…
Bankers forgot how to be clever. Bankers forgot how to be clever. Scott Ableman

Banking report suggests a cure for stupidity epidemic

For a brief period of time in the 1980s, one of the biggest selling t-shirts carried a print of an arrow which simply said “I’m with stupid”. It pointed to the person next to the witty wearer. In the 1990s…
Lloyds bank faces PPI redress claims. Lloyds bank faces PPI redress claims. Betty Longbottom

Embattled banks: Hester departs RBS and Lloyds hit by PPI scandal

Whether it is due to benchmark rigging, massive payouts to top executives, or failures to lend to house-buyers and businesses, the banking sector continues to make the headlines for all the wrong reasons…
Once feted as ‘conquistadors’, Spain’s banks now have problems closer to home. Once feted as ‘conquistadors’, Spain’s banks now have problems closer to home. marciofleury

Spanish banks on the verge of a nervous breakdown

As in the movie that led Pedro Almodóvar to become an internationally famous film director in the late 1980s, Spanish banks have been “on the verge of a nervous breakdown” during the 4 last years, facing…
Troubled bank is co-operating with the authorities. Troubled bank is co-operating with the authorities. Rui Vieira/PA

What went wrong for the Co-op Bank?

Collapsing business deals, massive financial losses, and a “junk” rating have made recent months a nightmare for the Co-op Bank. In March it announced losses of £634m for the 2012 financial year, largely…
RBS: Not as valuable as it used to be. RBS: Not as valuable as it used to be. David Cheskin/PA

RBS sale: bad for taxpayers, bad for banking

The UK could be about to make a multi-billion pound mistake. Plans to sell-off the 82% share of the Royal Bank of Scotland (RBS) and the 39% share of Lloyds owned by the taxpayer are gaining favour in…
The City has been plagued by financial disasters. Will the replacement of the Financial Services Authority with two new banking regulatory bodies be enough to stop the rot? The City has been plagued by financial disasters. Will the replacement of the Financial Services Authority with two new banking regulatory bodies be enough to stop the rot? AAP Pictures

After a long line of financial disasters, UK banks on regulatory change

If the UK Financial Services Authority (FSA) had been a dog, it would have been about 86 years old when it was put down on April Fool’s Day this year. Uncharitably, some say that the FSA, the lead regulator…
The scale of China’s off-balance sheet lending may seem extensive, but it’s not the scary beast that many commentators have made it out to be. The scale of China’s off-balance sheet lending may seem extensive, but it’s not the scary beast that many commentators have made it out to be. Philip Jagenstedt/Flickr

Light among the shadows: the upsides to a financial crisis in China

In recent months, talk of an emerging crisis in China’s financial sector has been getting louder. A few weeks ago such chatter reached a crescendo, at least in terms of a narrative, when two Nomura economists…
Talk of the Cyprus bailout sparked a surge in the value of virtual cryptocurrency Bitcoin. Talk of the Cyprus bailout sparked a surge in the value of virtual cryptocurrency Bitcoin. zcopley

Is the Cyprus crisis a boon for Bitcoin?

For most of us, banks represent a trusted and safe harbour for our money. Investing in fixed term deposits for example, is widely seen as a low-risk strategy. The global financial crisis changed that view…
Cyprus is making a last-ditch bid to negotiate a bailout deal from the IMF, the EU and the ECB. Cyprus is making a last-ditch bid to negotiate a bailout deal from the IMF, the EU and the ECB. AAP

As deadline looms, Cyprus' fate lies in the hands of the troika

Last week, the Parliament of Cyprus rejected a bill that would impose a levy of 9.9% on bank deposits over the insurance threshold of €100,000 and a levy of 6.75% on deposits below the insurance ceiling…
As the ABC’s Four Corners explored, small investors are being caught in an unregulated investment market, often with devastating results. Has the corporate regulator dropped the ball - or is it juggling too many? As the ABC’s Four Corners explored, small investors are being caught in an unregulated investment market, often with devastating results. Has the corporate regulator dropped the ball - or is it juggling too many? ABC Four Corners

As casualties pile up, has our investment sector become too big to regulate properly?

Stephen Long’s story last night on the ABC’s Four Corners beautifully illustrated the human cost of financial misconduct, as retirees and widows described the pain of having lost their super funds and…
Another day, another banking scandal: the UK Parliamentary Commission on Banking Standards has exposed the follies of the City’s badly behaved bankers. Another day, another banking scandal: the UK Parliamentary Commission on Banking Standards has exposed the follies of the City’s badly behaved bankers. AAP

London’s bad bankers thrown into the lion’s den

Though it rarely rates a mention in the Australian financial press, there is a spectacle in London at the moment that rivals even the most ferocious games at the Roman Colosseum. Almost every day, a bunch…
In a blistering speech to the Banking Committee, Senator Elizabeth Warren exposed profound weaknesses in the US' current system of financial regulation. In a blistering speech to the Banking Committee, Senator Elizabeth Warren exposed profound weaknesses in the US' current system of financial regulation. Flickr\mdfriendofhillary

Bankers left reeling as Senator Elizabeth Warren grills financial regulators

It was an artful if devastating performance. In just seven minutes, Senator Elizabeth Warren from Massachusetts signaled the arrival of what appears destined to be a powerful force on Capitol Hill. At…
More of the same: the UK government’s banking reform bill is merely another capitulation to the banking lobby. More of the same: the UK government’s banking reform bill is merely another capitulation to the banking lobby. AAP

UK banking reform bill won’t curb reckless risk-taking

Some four and-a-half years after the banking crisis that has resulted in massive public debt and a deep austerity program, the UK government has finally unveiled its Financial Services (Banking Reform…
Earlier this week, Stefan Ingves (left), chairman of the Basel Committee on Banking Supervision’s governing body, and Mervyn King announced amendments to Basel III’s liquidity rules for banks. Earlier this week, Stefan Ingves (left), chairman of the Basel Committee on Banking Supervision’s governing body, and Mervyn King announced amendments to Basel III’s liquidity rules for banks. AAP

Is the Basel process broken? You can bank on it

This year, the Basel process of banking regulation is 25 years old. In 1988, the first set of global banking regulations, known as Basel I, was adopted by the world’s senior banking regulator, the Basel…
As part of its settlement with the Department of Justice, an external monitor will be appointed to oversee HSBC’s corporate compliance processes. As part of its settlement with the Department of Justice, an external monitor will be appointed to oversee HSBC’s corporate compliance processes.

Banks on alert as regulators step up pressure on HSBC

This week, two different approaches to embedding restraint began to take shape as London-headquartered banks reflected on the exceptional power of the United States Department of Justice to shift cultural…
As regulators finally move on the Libor scandal, are they asking themselves the right questions? As regulators finally move on the Libor scandal, are they asking themselves the right questions?

In the Libor scandal, where were the regulators?

Welcome to the third and final part of Back to the Future. AS HSBC is fined US$1.9 billion for “egregious” money laundering and the first arrests are made in the Libor scandal, the need for the public…
Institutionalising restraint is business practice will prove challenging for HSBC and regulators alike. Institutionalising restraint is business practice will prove challenging for HSBC and regulators alike.

Banks behaving badly: HSBC settles in money laundering probe

The $1.92 billion deferred prosecution entered into by HSBC with US regulators is one of the most significant financial penalties imposed on a global bank. On Tuesday in a Federal Court in Brooklyn, HSBC…
Rampant litigation in the financial sector will only create more risk for Australia’s banks. Rampant litigation in the financial sector will only create more risk for Australia’s banks. AAP

Too many lawsuits might break the banking sector

This week, the National Australia Bank published its 2012 annual report, confirming that its net profit for the year had fallen by about 21%, mainly from higher bad and doubtful debt charges. Buried deep…
Will retail banks go the same way as Borders or Blockbuster Video? Will retail banks go the same way as Borders or Blockbuster Video? Image from www.shutterstock.com

The fate of retail banks: embrace technology or lose market share

How are retail banks — the incumbents of banking — likely to fare in the era of mobile banking? This is an increasingly crucial issue for banks. Mobile banking is a major technological development, and…
In developing and developed countries alike, mobile banking is making its mark. In developing and developed countries alike, mobile banking is making its mark. Flick\BankSimple

Say goodbye to the branch — the future for banking is upwardly mobile

In developed countries such as the United States, United Kingdom and Australia, mobile banking — describing the use of mobile phones to make financial transactions — is transforming banking from a physical…
Is there such thing as an ethical finance system? Proponents of Islamic finance believe so. Is there such thing as an ethical finance system? Proponents of Islamic finance believe so. Image from www.shutterstock.com

Can Islamic finance provide salvation for the banking sector?

Islamic finance has grown and expanded rapidly in recent years. It was recently announced that, following in the footsteps of some of its European neighbours, Germany will soon have its first Islamic bank…
Had it come out five years ago, APRA’s consultation paper could have left taxpayers footing the bill for BankWest’s collapse in 2008. Had it come out five years ago, APRA’s consultation paper could have left taxpayers footing the bill for BankWest’s collapse in 2008. AAP

Protecting taxpayers from systemic risk should be at the heart of APRA changes

At first glance, a consultation paper released by Treasury last week aimed at strengthening the crisis management powers of the Australian Prudential Regulation Authority, could pass for a routine tidy-up…
Is a full enquiry into Australia’s banking industry overdue? source: shutterstock. Is a full enquiry into Australia’s banking industry overdue? source: shutterstock. Image sourced from shutterstock.com

Debunking the myth of our ‘well-regulated’ banks

A Senate Economics Committee has been reflecting on life after the global financial crisis for Australian banks. The general consensus has been to date that Australian banks escaped the worst of the fall-out…
Taking care of business: given the glacial pace of financial reforms since the GFC, it is not unreasonable to expect another crisis of the same magnitude. Taking care of business: given the glacial pace of financial reforms since the GFC, it is not unreasonable to expect another crisis of the same magnitude. _Davo_

Crisis? What crisis? Five years on, we’ve surrendered to the global financial sector

It has been five years since the sub-prime mortgage crisis emerged in the US. This was followed by financial institutions suffering liquidity shortfalls in both US and Europe, and their eventual collapse…
A former mortgage broker - who is now facing fraud charges - has blown the whistle on predatory lending practices in Australia’s financial services industry. A former mortgage broker - who is now facing fraud charges - has blown the whistle on predatory lending practices in Australia’s financial services industry. Image from www.shutterstock.com

There are predators in our own backyard, but where are our financial watchdogs?

The level of sub-prime mortgages in Australia may be far in advance of what was previously assumed and provided for by banks. The story was broken on the ABC, and covered elsewhere. The revelations centred…
UK-listed bank Standard Chartered stands accused of violating US sanctions against Iran by hiding $237 billion in transactions with Iranian banks. UK-listed bank Standard Chartered stands accused of violating US sanctions against Iran by hiding $237 billion in transactions with Iranian banks. AAP

Standard Chartered’s laundering charges are another blow for the banking sector

The suit lodged against Standard Chartered in Manhattan by the New York State Department of Financial Services has served its first purpose: capturing the headlines and putting the banking industry once…
To ensure a sound financial system, policymakers should balance the twin objectives of stability and competition. To ensure a sound financial system, policymakers should balance the twin objectives of stability and competition.

Is competition crucial to the health of the financial sector? You can bank on it

Reactions to my call this week for another inquiry into Australia’s financial system have been mixed. Most commentators seem to accept that there’s logic in having another inquiry, even if some think that…
HSBC chief executive officer Irene Dorner testifies before the US Senate about allegations of money laundering within HSBC. HSBC chief executive officer Irene Dorner testifies before the US Senate about allegations of money laundering within HSBC. AAP

HSBC’s money laundering scandal is more than just risky business practice

Recent news that HSBC executives admitted to allowing Iran, terrorists and drug dealers to launder nearly USD$16 billion over a six-year period would make earth underneath you shake. How is that the bank’s…
A Diamond in the rough: Former Barclays chief executive Bob Diamond bore the brunt of public anger over the LIBOR scandal. But attention should be paid to behaviour of regulatory authorities. A Diamond in the rough: Former Barclays chief executive Bob Diamond bore the brunt of public anger over the LIBOR scandal. But attention should be paid to behaviour of regulatory authorities. AAP

Gloom of the system: Barclays fallout highlights structural flaws in financial regulation

As the Deputy Governor of the Bank of England, Paul Tucker, prepares to give evidence to the Treasury Select Committee, he will be mindful of the insult thrown at Bob Diamond, the recently crestfallen…
Will super Mario Draghi, President of the European Central Bank, come to the Eurozone’s rescue? Will super Mario Draghi, President of the European Central Bank, come to the Eurozone’s rescue? AAP

It will take courage to end the Eurozone crisis

Today Eurozone leaders will meet in Brussels. On the agenda is nothing less than the survival of the euro. Officially, it is about Spain: Spain’s economic and financial woes show the urgency. Moody’s drastically…
Could online peer to peer lenders compete with major banks? Could online peer to peer lenders compete with major banks? Flickr: Alan Levine

Could peer-to-peer lending challenge our banks?

In a recent speech, Bank of England executive director Andy Haldane has said that peer-to-peer (P2P) lending through online sites has the potential to eventually replace old-fashioned banking. It was followed…
Bankrupt former billionaire Sean Quinn accepted highly risky loans from Anglo Irish Bank before it collapsed. Bankrupt former billionaire Sean Quinn accepted highly risky loans from Anglo Irish Bank before it collapsed. AAP

Fallen billionaire Sean Quinn embodies Ireland’s boom to bust

The fall of the “Mighty” Sean Quinn from Ireland’s (and Forbes-listed) richest man to one of the world’s most indebted individuals is perhaps the biggest story of Ireland’s boom-to-bust recent economic…
Despite Cameron’s half-hearted efforts, democratisation of listed UK corporations is unlikely. Despite Cameron’s half-hearted efforts, democratisation of listed UK corporations is unlikely. AAP

‘Empowering’ shareholders won’t revolutionise corporate culture

Executive remuneration is out of control in the United Kingdom. The final report by the High Pay Commission concluded that “there is rarely a link between directors’ incentives and the way a company performs…
Loose regulation in the UK and elsewhere have left big banks vulnerable to crises. Loose regulation in the UK and elsewhere have left big banks vulnerable to crises.

Without serious reform, reckless banks will fall like dominoes

The most interesting aspect of the United Kingdom’s Financial Service Authority’s exhaustive review of the failure of the Royal Bank of Scotland (RBS) is contained in the foreword, penned by the organisation’s…
ANZ and NAB have cut their mortgage rates. Will the other two major banks follow suit? ANZ and NAB have cut their mortgage rates. Will the other two major banks follow suit? AAP

Are banks gouging by not passing on interest rate cut?

ANZ and National Australia Bank have passed on the Reserve Bank of Australia’s 0.25% interest rate cut to mortgage holders, lowering their standard variable rates. Treasurer Wayne Swan called on the big…
Personal loans should be used to fund major infrastructure projects, like the National Broadband Network. Personal loans should be used to fund major infrastructure projects, like the National Broadband Network. AAP

Want to end the GFC? Put debt to good use

The Global Financial Crisis should be called the Global Debt Crisis. Too much debt has been created and there is not enough productive capacity to pay the interest on the debt, let alone repay the loans…
Outgoing IBM head Samuel Palmisano with successor Virginia Rometty – the company’s first female CEO. Outgoing IBM head Samuel Palmisano with successor Virginia Rometty – the company’s first female CEO. AAP

Rometty smashed IBM’s glass ceiling – now for equality across the board

The appointment of Virginia Rometty as the first female chief executive of IBM represents a significant step forward for women in the world of business. But while Rometty’s elevation makes her one of the…
Euro banks have been urged to reinforce their balance sheets. Euro banks have been urged to reinforce their balance sheets. AAP

Can ‘living wills’ protect the banking system?

Eurozone leaders have moved to address liquidity fears, with the European Central Bank announcing new measures to head off a credit crunch. Britain has also announced quantitative easing measures. Outgoing…
UBS chief Oswald Gruebel has stepped down after a rogue trader cost the bank $US2.3 billion. UBS chief Oswald Gruebel has stepped down after a rogue trader cost the bank $US2.3 billion. AAP

As UBS boss quits over rogue trader, banks must face some risk realities

The chief executive of Swiss banking giant UBS, Oswald Gruebel, has quit following revelations of a $US2.3 billion fraud by “rogue trader” Kweku Adoboli. But the news will come as cold comfort for investors…
Well-intentioned credit protection regulations could make it hard for some people to secure loans. Well-intentioned credit protection regulations could make it hard for some people to secure loans. AAP

Responsible lending doesn’t have to be restrictive

The Federal Government has taken significant steps in recent years to protect consumers from predatory lending practices, such as very high-interest “payday loans”. An unfortunate, though surely unintentional…
Carrying cards and cash on your phone seems like a big call. Carrying cards and cash on your phone seems like a big call. Google

Is Google Wallet a virtual game-changer?

So it’s finally here: Google Wallet, a free Android app that turns your (Google) smartphone into a mobile payment system, launched today. To do this, the company has partnered with Citi, MasterCard, First…

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