Monday, October 25, 2010

Hockey to spell it out at 10.55 am: "It's time to talk Banking"

Shadow Treasurer Joe Hockey will today call for a full-scale inquiry into Australia's banking system ahead of expected record profit results from the National Australia Bank, Westpac and the ANZ.

In an address to the Australian Industry Group entitled "It's time to talk Banking" Mr Hockey will argue that 13 years on from the landmark Wallis inquiry into the Australian financial system Australia's banks are beyond effective control and are engaging in behaviour that will put the nation at risk.

While the big four are telling investors they want to be "growth stocks" expanding overseas, Australia's interests would be better served by them sticking to their knitting as they did before the financial crisis.

The Reserve Bank has repeatedly argued that the biggest single strength of Australia's banking system going in to the crisis was the absence of overseas exposures.

Mr Hockey will take up a call made by six prominent economists mid last year for a new public inquiry into the financial system... to be led by a respected figure such as former Reserve Bank Governor Ian Macfarlane.

The open letter said it remained uncertain whether Australia's successful navigation of the crisis was due to foresight or good luck.

"We would do well not to discount the possibility that a good roll of the dice left us without more significant system failures," the letter said. "In future crises, we may not be so lucky."

Rejected at the time by Treasurer Wayne Swan the call for a new inquiry garnered support from independents and the Greens.

Should the Coalition introduce legislation in the current parliament, it may well pass even if opposed by the government.

Mr Hockey will argue that banks are unlike other companies receiving taxpayer guarantees of their deposits and borrowings and enjoying access to the Reserve Bank as a lender of last resort.

Published in today's SMH

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