Friday, May 25, 2018

Westpac cut corners in classifying loan residential rather than commercial

The financial services Royal Commission has heard how the race for banker commissions might have contributed to a loan being wrongly classified as residential rather than commercial. 

Westpac executive Alastair Welsh conceded that a Bank of Melbourne banker got it wrong and may have been driven by performance targets in cutting corners to get the loan approved. 

Away from the Royal Commission, the Commonwealth director of public prosecutions Sarah McNaughton says there is no confirmation that her budget for fighting financial crime will be extended beyond this financial year.

Here's my report from The World Today

Thursday, May 24, 2018

Bank of Queensland admits error on approving franchise loan which went into immediate default


The financial services Royal Commission has heard that the Bank of Queensland mishandled a small business loan for a teacher to buy two Wendy's franchises which went into immediate default. 

Away from the Royal Commission, ABC's Peter Ryan says Westpac has had a partial victory after being accused of manipulating the bank bill swap rate. 

The Federal court says while Westpac breached the ASIC Act four times, ASIC was unable to prove the market manipulation or market rigging.



Read the key except from the Westpac BBSW ruling from Justice Beach


Reserve Bank governor Dr Philip Lowe warns surging China debt risks "serious accident"

Reserve Bank governor Dr Philip Lowe has warned that surging debt levels in China raises the risk of a "serious accident". 

Speaking at the Australia-China Relations Institute, Dr Lowe did not directly comment on political tensions between Australia and China but said there "can be ups and downs" in all relationships. 

ABC's Peter Ryan says Dr Lowe's direct comments are significant given concerns about Australia's diplomatic impasse with China.

Here's my report from this morning's AM

Read the speech from Dr Philip Lowe

Wednesday, May 23, 2018

Royal Commission questions "personal responsibility" of small business borrowers when loans go bad



The personal responsibility of small business borrowers who take out loans to buy franchises has been questioned at the financial services Royal Commission. 

ANZ executive Kate Gibson says the ability of borrowers to service repayments is a critical feature in approving a loan. 

Counsel assisting Michael Hodge QC suggested it was important for borrowers to take personal responsibility for repayments and to identify potential problems in a business.

Here's my take of this morning's hearings

Tuesday, May 22, 2018

Banking Royal Commission: Westpac maintains its followed policy in decision to seize disability pensioner's home





Westpac continues to maintain it acted appropriately and within policies when it agreed to make a disability pensioner guarantor for her daughter's business loan. Appearing at the financial services Royal Commission, Westpac executive Alastair Welsh said the bank followed process which included advising pensioner Carolyn Flanagan to seek her own legal advice. ABC's Peter Ryan says Westpac's reputation has been damaged by suggestions that it treated Ms Flanagan harshly and did not take into account her financial and medical circumstances.