...after the criminal banks!
Citizens Electoral Council leader Craig Isherwood today called on the Abbott government to finally hold the banks accountable for their financial crimes, before it goes off on its crusade against union corruption.
Isherwood said, “In 2009 I called for an Australian Pecora Commission, modelled on the U.S. investigation of Wall Street led fearlessly by Ferdinand Pecora from 1932-34, which exposed the financial crimes that led to the Great Depression, and the corrupt dealings between the Wall Street banks and American politicians that enabled the banks to get away with their crimes.
“So far, outside of some Senate inquiries there has been no serious investigation of financial crimes in Australia. Yet after a few high-profile examples of union corruption, people in the Abbott government are pushing for a Royal Commission into the unions.
“I say investigate both,” he said, “but unless the government goes after the banks with the same zeal it has to tear into the unions, it is being corrupt itself, by covering up for corruption on a scale that crooked unionists could only dream of.”
Isherwood cited examples of the banks not being held accountable:
- The central role of the Commonwealth Bank, Macquarie Bank and the Bank of Queensland in the Storm Financial scandal, in which hundreds of customers in North Queensland were lured into borrowing heavily against their homes in order to gamble on the stock market, and were subsequently ruined in the 2008 GFC.
- The evidence that loan officers in not just mortgage brokers, but also the Big Four banks, fraudulently doctored loan documentation to justify making low-doc loans that many customers subsequently couldn’t afford.
- The relationship between Macquarie Bank, aka the Millionaires’ Factory, and numerous ex-politicians and public servants who have gone to work for Macquarie after, in many cases, being involved in public policy decisions such as privatisations and public-private partnerships from which Macquarie directly profited.
- The role of Australian-based banks in the UK LIBOR scandal, and the fact that six of the 14 banks caught rigging the LIBOR in London are also involved in setting Australia’s benchmark interest rate, the Bank Bill Swap rate (BBSW). Rigging the LIBOR interest rate allowed the banks to skim off the top of hundreds of trillions of dollars of deals over three decades, and it was known and condoned at the highest levels.
- Commonwealth Bank’s sudden decision in 2012 to no longer disclose its exposure to the toxic over-the-counter derivatives market, after increasing its exposure at a breathtaking rate in the three previous years. OTC derivatives are purely gambling side-bets that are often instruments of outright fraud; it was the global meltdown of the OTC derivatives bubble that caused the GFC in 2008.
Isherwood noted that there have been numerous corporate collapses in recent years in which the losses were borne by the mum and dad investors but not the banks or the well-connected.
Isherwood concluded, “It is time to clean up the criminal activity in the financial system that has been allowed to flourish under the cover of deregulation.
“We must also impose the only effective regulation which can protect ordinary people from the predations of financial speculators, which is a Glass-Steagall separation of retail banking from investment banking.
“The only reason for the government to not launch a thorough investigation of criminality in the banking system, and not go with Glass-Steagall, is to cover for the bankers.
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"The relationship between Macquarie Bank, aka the Millionaires’ Factory, and numerous ex-politicians and public servants who have gone to work for Macquarie after, in many cases, being involved in public policy decisions such as privatisations and public-private partnerships from which Macquarie directly profited."
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