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The adoption of a borrower-payer system for mortgage brokers is expected to increase the power of the big banks, which some badysts say have already benefited from a clear victory in the final report of the royal commission. Bank investigation.
The four big banks took advantage of a $ 20 billion stock market gain on Tuesday after Royal Commissioner Kenneth Hayne, QC, decided not to recommend a radical structural reform of the banking sector.
The rating agency Moody's was among those who predicted that the move to an acting fee paid by borrowers to mortgage brokers would affect competition.
"We expect this change to consolidate the market position and pricing power of the Big Four banks," said Moody's.
Treasurer Josh Frydenberg also said that charging customers would benefit big banks.
"In fact, you would put the mortgage brokers out of business and put that activity on the big banks," said Frydenberg.
"We do not want to give a big free kick to big banks."
The chief executive of the Finance Brokers Association of Australia, Peter White, said that if they were implemented, Mr Hayne's recommendations would send the country back "to the dark age when some banks held all the power."
"The set of implementations would devastate an industry and raise interest rates because competition would be reduced in the market, service standards would be eroded and the borrower would lose a lot of time" said Tuesday Mr. White.
UBS banking badysts said Hayne's final recommendations were well below market expectations, saying the report was disappointing and represented a clear victory for the banks.
Analysts said the large number of faults publicly disclosed by the royal commission would likely allow banks to change their behavior in the short term.
"However, despite the strengthening of regulators' supervisory powers, most cultural changes will be self-imposed," they said.
"In the absence of powerful recommendations, we are concerned that it may be difficult to ensure a lasting cultural change over the years, especially with the rotation of management members and boards of directors." 39; administration. "
The expert from the Australian National University and former federal Liberal leader, John Hewson, also warned that banks could return to their "old habits" without a fundamental change in culture.
"Even though the royal commission may upset the banking sector for a while, putting an end to extreme abuses and other reprehensible behavior, with perhaps significant civil and criminal penalties, it can not may not change the basic "culture" of the bank that has been fundamental to this environment, "said Dr. Hewson.
"Banks' boards of directors have not yet recognized and accepted the ultimate responsibility for building a culture of profit maximization and shareholder value at the expense of customers and other stakeholders. "
He said the boards of directors agreed on the strategy, had appointed the CEO to implement it and approved the corresponding compensation structures.
"A fish rots of the head," said Dr. Hewson.
Hayne blamed some bank managers for not recognizing and accepting responsibility for this deplorable behavior. He has received the most severe criticism he has sent to the Australian bank's chief executive, Andrew Thorburn, and to Ken Henry, former Treasury secretary.
Mr. Thorburn, upset, promised to stay at the helm of change at NAB, insisting that he and Dr. Henry were doing the right thing, correcting mistakes and giving priority to customers.
Australian Associated Press
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