Liberals agree to implement FOFA, a decade too late

Liberals agree to implement FOFA, a decade too late

The recommendations come after the public inquiry heard 11 months of shocking revelations of the financial industry's wrongdoing, including that fees were charged to the accounts of dead people and that cash bribes were paid over the counter to win mortgage business, wiping A$60 billion from the country's top finance stocks.

As the charts below from Yahoo Finance show, shares in Australian Finance Group crashed 30% at the open... When misconduct was revealed, it either went unpunished or the consequences did not reflect the seriousness of what had been done, the inquiry found. Shareholders registered their distaste by voting against the executive remuneration plans of two of Australia's biggest financial institutions, National Australia Bank and Australia and New Zealand Banking Group.

Veteran bank analyst Brian Johnson of CLSA believes the recommendations of the Royal Commission report are broadly in line with his expectations and given the banks have already begun to implement numerous recommendations (and their share prices already de-rated), he thinks banks stock prices could now move higher.

But the country's mortgage broking sector is facing an overhaul of its remuneration structures, whereby the borrower - not the lender - will need to start paying the mortgage broker, disrupting a major channel banks use to increase their home loan books.

"It's a scathing assessment of conduct driven by greed, which fell far below community expectations", Treasurer Josh Frydenberg said. "The Royal Commission recommendations are largely an extension of recent regulatory changes". Among the wealth managers, AMP ((AMP)) is up 9.5% and IOOF Holdings ((IFL)) 13.9%. The broader market closed 0.5 percent higher. "As we expected, nothing radical", says Deutsche Bank, who adds: "Indeed it's quite practical but some may say too docile".

"At this stage, it does not appear to be the case".

Fallout from the Royal Commission has already prompted banks to tighten lending practices in their core mortgage businesses, contributing to some of the biggest housing price falls in a generation.

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A crowd of curious onlookers gathered to watch the performance, some of them taking pictures and video of the weird act. The husband dangerously swung his 4-month-old baby girl in the middle of the street.

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He said a review would take place to assess the impact of removing upfront commissions, given previous reports raised concerns about the move.

Labour says it expects to adopt all the commission's recommendations.

But he has warned against overreaching and cutting off credit flows, a likely battle-line for the government as it fights for electoral survival.

Dr Henry dismissed suggestions from the royal commission that he seemed unwilling to accept criticism of how the board dealt with issues like charging fees for no service.

The Australian Banking Association has leapt to the defence of the NAB bosses. "I know that is not so", he said.

"There has to be some scalps in the banking industry so people can see that justice has been done and the faults of the banking industry can be rectified and lessons have been learned".

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