Banks Don't Need Royal Commission

After arguing in The AFR on Saturday that I thought the majors banks and Macquarie's credit ratings would eventually be downgraded one notch as regulators remove implicit government guarantees while forcing further capital build, today I maintain that the politically populist call for a Royal Commission is unnecessary given, among other things, the recently published Financial System Inquiry, ASIC's aggressive prosecution of alleged cases of market-manipulation and breaches of the financial advice laws, the ACCC's likely attempts to unwind "vertical integration" though the competition law's new "effects test", and APRA's plan to implement the final version of the Basel 3 banking rules. Excerpt: "A populist multi-year royal commission that recycles through these issues again and delays remedial work at massive taxpayer cost would be regarded dimly by the global capital markets that fund our banks and which have come to treat Australia as a centre of regulatory excellence. Share prices and superannuation savings would be hit while the cost of borrowing would increase further than actual conditions warrant. Shorten's case is, therefore, unconvincing." Free (VIEW LINK)