It may not have been Goebbels who uttered the infamous phrase “When I hear the word culture, I reach for my gun”, but the phrase springs to mind in considering the (very rapid) appointment of former Commonwealth Bank head, Future Fund chairman and financial services inquiry head David Murray to the recently vacated AMP chair. While Murray’s appointment to the Brenner Pass has been welcomed, it’s worth reflecting on what no journalist over the weekend except Fairfax’s Elizabeth Knight noted about Murray’s view of regulating culture.
ASIC is pursuing this notion that you can have liability for a culture breach. It is absolutely impossible to legislate for that. In fact you could argue that it’s anti-competitive, because you can’t have the same culture for everyone by definition — a great culture is competitive advantage. It’s anti-competitive. It’s inefficient. And to be perfectly candid again, there have been people in the world who’ve tried to enforce culture. Adolf Hitler comes to mind.
This was Murray’s view just over two years ago. As the royal commission has confirmed for us recently, any comparison of ASIC with an enthusiastic boy scout troop, let alone the Nazis, is the stuff of fantasy. But it reflects how profoundly out-of-touch Murray can be, because it’s apparent that the financial services sector’s problems are profoundly cultural.
Before the government was forced to allow a royal commission, the Australian Prudential Regulation Authority (APRA) and the Reserve Bank as well as ASIC repeatedly outlined their concerns about bank culture. Last week’s APRA review of the Commonwealth Bank was all about the bank’s culture, the failings within it and how the board failed to address them. AMP has already admitted it needs to overhaul its culture. But Murray appears to think culture should be completely outside the purview of regulation — that is, entirely self-regulatory. Because Nazis, or something.
Murray, of course, is well know for having controversial opinions. He thinks the Rudd government should have done exactly nothing in response to the financial crisis except guarantee bank deposits. He is a notorious climate denialist.
But it’s in relation to financial regulation that his views are particularly problematic. A year ago, Murray opined that a royal commission was “not only unnecessary, it sets up higher systemic risk because the outside world doesn’t see the need for one”.
Murray thought the banks were too heavily regulated. “It’s a real problem when you’ve got ASIC bashing the banks on a weekly basis … there’s the cost of anti-money laundering compliance and other regulation, and they’re now funding ASIC as well as APRA. It really is too much.”
Murray’s comments on money-laundering came before the exposure of the CBA’s problems. Perhaps he has changed his view on money-laundering regulation. And perhaps, given the royal commission has gifted him a major chairmanship, he’s changed his mind on that too. Or perhaps he’s still seeing swastikas wherever he looks.
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