Brokers split over banking royal commission

by Paolo Taruc05 Dec 2017

Mortgage brokers are split over whether the royal banking commission was justified, according to a recent survey by MyState Bank. Prime Minister Malcolm Turnbull announced last week the commission will push through, as part of efforts to restore Australians’ confidence in the banking sector.

“Since the financial crisis, there have been examples of misconduct by financial institutions. Some of them extremely serious. And that's demanded a response from the institutions themselves and from government,” Turnbull said. “The only way we can give all Australians a greater degree of assurance is a royal commission into misconduct into the financial services industry.”

MyState’s poll was conducted before the prime minister’s announcement. Some 38% of respondents favoured the commission, with 14% saying it was “definitely needed” and the other 24% stating it was needed “on balance”.

Of those against a high-level inquiry into banking, 17% of respondent brokers firmly said no, it was not needed and 24% stated that there were “other more important issues to address” within the Australian economy.

Results showed the broker industry remained overall positive about the housing and mortgage markets, according to MyState group executive broker distribution Huw Bough. The industry had seen recent changes as market adjustments rather than a major change or precursor to something more significant, he said.

Australia’s four major banks have been against the inquiry as they argued that there was no need for it at all. In a letter addressed to Treasurer Scott Morrison, executives of the major lenders said further inquiries into the sector are “unwarranted” but “in the national interest” for political uncertainty around the sector to end.

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