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Banks, behaving badly
blacksheep
post Posted: Feb 20 2019, 09:12 PM
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Some questions being raised by Greens senator Peter Whish-Wilson at the Senate estimates on Wednesday evening - tonight.

ASIC boss James Shipton faces questions over former Goldman Sachs role and 1MDB scandal.

ANZ also gets a mention- https://www.theguardian.com/world/2019/feb/...nd-1mdb-scandal

QUOTE
Whish-Wilson was also expected to raise questions about another Australian connection to the 1MDB scandal. Malaysian investigators have unearthed new details about irregularities with a bond sale carried out in 2009 for a precursor of 1MDB by a Malaysian bank called Am Bank, which is 24% owned by the Australian bank ANZ.

According to a recent report by Bloomberg, the 2009 bond sale arranged for TIA involved bonds being sold at a large discount to insiders which were then quickly resold – some of them on the same day – at a large profit.

Low Taek Jho, the fugitive Malaysian financier believed to be behind the 1MDB scam, was also allegedly the mastermind of the TIA scheme and reportedly profited from it to the tune of $126m.

Sarawak Report, the campaigning group that first exposed the 1MDB scandal, says Am Bank was involved in the bond sale “every bit of the way” and therefore ANZ has a case to answer about why the alleged corrupt dealing went ahead.

Clare Rewcastle Brown, of the Sarawak Report, said: “It makes [ANZ’s] position every bit as awkward as that of Goldman Sachs, which performed a similar role during the later bond issues by 1MDB leading to investigations by the FBI leading to criminal charges from Malaysia as well.”

It renewed calls for an investigaton by Asic into Am Bank’s involvement.

ANZ declined to comment.




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Feb 7 2019, 01:22 PM
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In Reply To: blacksheep's post @ Feb 6 2019, 10:07 PM

QUOTE
Speculation in the media and being fuelled by Labor about potential insider trading in bank shares on Monday ahead of the royal commission report's public release is, in the words of one well-placed official source, almost certainly "bulls--t".

https://www.afr.com/markets/bank-royal-comm...20190207-h1aye1

No one ever seems to provide the names of these "well placed sources" - on both sides of the fence



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Feb 7 2019, 09:22 AM
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In Reply To: triage's post @ Feb 7 2019, 07:01 AM

The regulator should have been alert to the possibility of a leak, watching trading action and issuing a "speeding ticket" - just the same as they do with penny dreadfulls - but they didn't sadsmiley02.gif Just IMHO



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
triage
post Posted: Feb 7 2019, 07:01 AM
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In Reply To: blacksheep's post @ Feb 6 2019, 10:07 PM

Yeah I doubt it would have come out of the lock-up. More likely it came from a polly or one of their staffers who would have been poring over and discussing the report for the entire weekend. Sometimes it's not what you say but what you don't that conveys the message. Shameful that they did not release the report on Sunday night. So obvious what they were setting up.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
blacksheep
post Posted: Feb 6 2019, 10:07 PM
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In Reply To: blacksheep's post @ Feb 6 2019, 01:40 PM

Labor calls for leak investigation
QUOTE
The debate over more sitting days to deal with the banking royal commission's findings comes as Labor also demands an investigation into whether its final report was leaked early.

The Federal Government released Commissioner Hayne's report at around 4:20pm on Monday, after the share market had closed.

But Shadow Financial Services Minister Clare O'Neil has written to the head of the Prime Minister's Department to investigate whether it remained under lock and key until then.

A lock-up for media and other interested parties to pour over the report under embargo began at 1:00pm Canberra time on Monday.

"At approximately 11:00am on Monday traders plunged half a billion dollars into bank shares; an investment which turned a $22 million profit within just 24 hours, thanks to the unexpected increase in the value of bank shares when the market reopened on Tuesday morning," Ms O'Neil wrote to Dr Parkinson on Wednesday.

"Given that the lock-up commended at 1:00pm — two hours after this activity on the ASX — and the Hayne report was in strictly limited circulation for a number of days within the Government prior to its official publication, I ask that you investigate whether information was leaked by a Ministerial Office, a Minister or a member of the Australian Public Service prior to its publication."

Some have suggested the banks got off fairly lightly from the royal commission's final report, despite the damning testimony heard during the hearings.

On Monday night, Treasurer Josh Frydenberg was asked about the activity on the market and whether the big banks got a briefing that morning.

"Absolutely not. There was a lock-up and there were security guards around Parliament House," he told the ABC's 7:30 program.

"There was obviously Treasury officials and it was very, very closely monitored.

"The only people who were allowed into the lock-up were stakeholders and, when it came to the banking industry, it was by their representative body and, of course, senior journalists."

https://www.abc.net.au/news/2019-02-06/cros...nquiry/10787536



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Feb 6 2019, 01:40 PM
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In Reply To: blacksheep's post @ Feb 5 2019, 10:47 AM

QUOTE
Below are daily charts yesterday for all 4 Banks - odd how the trading patterns for all look identical - big spike in the morning


Appears Pascoe questions that big spike on Monday's charts (I Posted below). Fortunately we now have a new watchdog with much bigger teeth biggrin.gif - perhaps he's looking into? I wouldn't hold my breath - business as usual.

A quick $22 million profit for royal commission insider trading?
Michael Pascoe

QUOTE
Last week Josh Frydenberg “guaranteed” the royal commission’s final report would not leak while the government sat on it for three days.

About $22 million says that guarantee wasn’t worth anything.

The welter of news in Kenneth Hayne’s report has tended to overshadow what appears to be some rather obvious insider trading.
Someone, somewhere, somehow received a nod and wink on Monday morning that the banks would actually come out of the royal commission better than expected.

“Front running” is the market euphemism for what happened next.

“Any alternate explanation is fanciful,” a fund manager wrote to me.

With the banks down a quarter per cent, some trader looked out the window at 11am and noticed it was all sunny and cheerful and decided to buy a half billion dollars worth of the major banks ahead of the report into their own malfeasance. I don’t think so.”

That half-billion plunge at 11am was worth a quick $22 million profit on Tuesday morning

Interestingly, AMP was not part of the 11am action. AMP shares didn’t get their sudden ramp up until 3.15 pm.

It appears the leak that the banks would be fine didn’t initially extend to AMP. The necessary nod there was that vertical integration of wealth management would be allowed to continue, against most observers’ expectations – and certainly mine.

The preservation of vertical integration – allowing an institution to own financial advisers, the investment platform they use and provide products for them to sell – seemed to me to be dead for all money.

It looked like three of the four big banks thought so too, as they sold out of the adviser business, leaving only Westpac and AMP as the two sticklers for the old structure that itself played a major role in creating the royal commission..


read more - https://thenewdaily.com.au/money/finance-ne...er-trading/amp/?



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: triage  
 


triage
post Posted: Feb 6 2019, 12:16 PM
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In Reply To: blacksheep's post @ Feb 6 2019, 11:08 AM

Gee there's no irony in the setting for that photo: scummo and two bankers at a happy clappy convention on values.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
blacksheep
post Posted: Feb 6 2019, 11:08 AM
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In Reply To: triage's post @ Feb 6 2019, 10:46 AM

Appears this RC was a stitch up from the start - This letter from the big banks helped shape the royal commission

QUOTE
It is a revelation that underscores the close relationship between the major banks and the Government.

When the heads of the big four banks wrote to the Federal Government, reluctantly calling for a royal commission into their industry, they asked the Treasurer to vet a draft of their letter, documents released under Freedom of Information have revealed

https://www.abc.net.au/news/2019-02-05/big-...ection=business

Probably nothing wrong with wining/dining at this event, but geez these 3 amigos look a bit too friendly for my liking - particularly whilst calls were being made for the RC around that time - pic was posted Sept 2017. The letter the banks wrote was dated 29/11/2017, the RC was called shortly thereafter
Attached File(s)
Attached File  scomo.jpg ( 94.76K ) Number of downloads: 2

 




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
triage
post Posted: Feb 6 2019, 10:46 AM
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In Reply To: mullokintyre's post @ Feb 5 2019, 06:22 PM

Mick - If Kenneth Hayne was a racehorse there would have been a stewards enquiry called and he would have been taken straight to the swabbing box and the vet would be whistling up a sample. Up till now I would not have considered it a possibility that a high court judge in Australia, even a retired one, could be nobbled, but there is little doubt in my mind that for whatever reason Hayne ran dead in writing up his report.

I thought Rowena Orr looked like something or someone had rattled her towards the end as well. I said at the time that the CEO of Combank had got the better of her, she seemed not to challenge some of his absurd assertions like she had done with previous people. Maybe she had a sick kid, maybe she had been cowered by an young buck alpha male, maybe it had been suggested to her that she needed to look ahead to her career prospects, I don't know but that was the first time I had the impression that the royal commission was starting to back away from its initial impressive approach.

I now see the productivity commission has come out and said that the various airport monopolies in Australia are, despite all indications, not behaving like monopolies. Graham Samuel, who admittedly heads up the airline lobby group, was scathing about that finding on ABC radio national this morning. He gave the simple example where the productivity commission found that stupidly high carpark prices at airports are fair because of the convenience factor, and he pointed out that to park at Sydney Airport costs $54 but to park at a nearby major hospital is $27, half the price. Smells like another dodgey report that protects existing oligopolies that have tight links with this government.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

Said 'Thanks' for this post: blacksheep  
 
blacksheep
post Posted: Feb 6 2019, 10:07 AM
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In Reply To: blacksheep's post @ Feb 5 2019, 01:11 PM

Banking royal commission: That’s another financial sector inquiry done, see you all again in 2029!
Andrew Linden and Warren StaplesThe West Australian
Tuesday, 5 February 2019 2:20PM

QUOTE
Every 10 to 15 years it’s the same.

Ever since financial deregulation in the 1980s we’ve had a finance industry scandal followed by an inquiry, a quick fix, and a declaration that it shouldn’t happen again.

In the early 1990s there were royal commissions into the $1.7 billion Tri-continental/State Bank Victoria collapse, the $3.1 billion State Bank of South Australia collapse and the WA Inc collapse which explored the interrelated activities at Rothwells bank, the $1.8 billion collapse of Bond Corporation and the $1.2 billion siphoned from Bell Resources.

A decade later in 2003 Justice Owen reported on the $5.3 billion collapse of Australia’s largest insurer HIH.

And now, bang on schedule, we have Kenneth Hayne delivering the final report of a royal commission into systemic misconduct in banking, superannuation and financial services industry to a Government that voted 26 times against holding it.

There are two particularly striking things about the 10 to 15-year cycle.

One is the rhythm of public inquiries followed by reports, then (sometimes) trials, then books, then almost everyone forgetting (except for those personally scarred) only for problems to resurface later.

The other is that the times between have been punctuated by government-commissioned banking and financial system reviews: the 1991 Campbell Inquiry, the 1996 Wallis Inquiry, the 2010 Cooper superannuation review and the 2012 Murray Review. Each either missed or downplayed the links between poor governance, industry structure, systemic misconduct and prudential risk.

Has Kenneth got the frequency right this time?
Commissioner Kenneth Hayne’s 1000-page final report hasn’t gone far enough to end this cycle.

While his referral of 24 misdeeds for possible criminal and civil prosecution will help in righting past wrongs and perhaps focus the minds of directors and executives, the impact will be generational rather than permanent.

The flurry of prosecutions and actions will again reveal problems with the law — gaps in coverage, inadequate penalties and cases the law won’t allow to stand up.

Taken together the recommendations are a patchwork of measures that if implemented will over time be eaten away — and at some point will be dismantled — because the rationale for their adoption will be forgotten.

Even before they are implemented they will have to run the gauntlet of a massive subterranean lobbying effort from industry to water them down, something Hayne indicated he expected.

The deepest flaw lies unaddressed …
Even though Hayne emphasises the link between systemic misconduct, governance, structure and prudential (system-wide) risk, something that Treasury, the RBA and Australia’s three business regulator amigos — APRA, ASIC and the ACCC — have long rejected, he makes no concrete suggestions to tackle it.

As we have written previously, research tells us big systemically important shareholder-focused universal for-profit banks that cross-sell products are more profitable than smaller banks in the good times but are more prone to misconduct and to failure in the worse times.

Australia’s big four fit the bill — they’re big, they have been vertically integrated one-stop shops, they are very, very profitable and they are very focused on shareholder returns.

While the banks, apart from Westpac, have divested themselves of wealth management and insurance arms for now there is nothing stopping them reacquiring them in the future.

This means we are once again 10 or 15 years away from systemic misconduct resurfacing as big banks seek to become more profitable.

… and putting the onus on directors won’t much help
While heads might roll in yet another round of internal investigations to fix bank culture, it is wise to remember that as Adele Ferguson observed ANZ’s internal investigation of the Opes Prime collapse left the bigger governance lessons “unlearned”.

Directors and senior executives of failed companies continue to live charmed lives.

The directors of Babcock and Brown were cheered as they left the building, while friends and family of the disgraced One.Tel director Jodee Rich have resurfaced at Hayne and other public inquiries.

Some of the One.Tel directors have had long corporate careers. The former chair of the collapsed Allco Finance Group Bob Mansfield went on to review the ABC.

As Adam Schwab bluntly put it, “corporate Australia is nothing if not forgiving”.

It’ll chase horses rather than close doors
Hayne is persisting with a chasing bolting horses approach to misconduct that relies on detection and enforcement.

We have argued this approach is just not as a effective as other alternatives such as two-tier boards and employee directors which have a better track record of keeping stable doors closed and horses tethered.

Without them we could very easily have another crisis and another royal commission in 15 to 15 years time.

Ireland has been prepared to change corporate structures. After the meltdown of its financial system triggered by the end of a “classic vanilla property boom” its parliament legislated to appoint public interest directors to the boards of its failed banks.

These changes were designed to ensure banks directors put the public interest first, ahead of shareholders interests and even customers interests.

It’s beyond time we did it here.


Andrew Linden is a sessional lecturer, PhD (Management) candidate at the School of Management, RMIT University. Warren Staples is a senior lecturer in Management, RMIT University


https://thewest.com.au/business/banking/ban...-ng-b881095361z



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
 


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