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Banksters: The scandalous conduct of a global bank

The Challenge

 

HSBC is one of the world’s largest and most powerful financial institutions with offices on five continents, including in Australia. It likes to spruik its financial might and global reach. Behind the corporate gloss, it has a far less attractive reputation.

The bank has been at the centre of several of the biggest financial scandals uncovered this century. HSBC, or the Hong Kong & Shanghai banking Corporation has been implicated in a raft of illegal activities, from money laundering for the mafia, to enabling tax evasion and currency manipulation.

Despite these revelations, the bank has flourished, leaving investigators frustrated. The film raises disturbing questions about who is in charge of regulating the banks in an increasingly globalised financial world. Regulators stand accused of failing to adequately punish the bank and impose penalties that hold HSBC to account.

This story about the HSBC is of a piece with accounts of bank activity being outlined in our current bank enquiry but at a much higher level.

What we see in Australia's Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is that the banking regulator (ASIC) has not regulated bank activities as one would hope. Also, there is a suggestion that when misdeeds are uncovered those responsible at higher levels leave the offending banks but are then likely to be rehired elsewhere. One wonders what if anything about the ways in which banks behave will change once the enquiry is over.

The culture underlying banking is itself an obstacle to reforming the banking industry: "If we educate our graduates in the inevitability of tooth-and-claw capitalism, it is hardly surprising that we end up with justifications for massive salary payments to people who take huge risks with other people’s money. If we teach that there is nothing else below the bottom line, then ideas about sustainability, diversity, responsibility and so on become mere decoration: https://www.theguardian.com/news/2018/apr/27/bulldoze-the-business-school "

The big question is whether or not we can regulate the banks properly (or are they simply too large and too powerful)?

What do you consider we need ‘more of’, and what do we need ‘less of’ to strengthen current policy, legislation and regulation?

How effective can legislation and policy be if one takes into account the current banking culture?

 

Each Monday MindHive Number One ranked consulting problem-solver, statistician Peter Grimbeek, leads a challenge based on Australia's Four Corners’s investigation. We take seriously the often quoted, “if you’d like to continue the conversation head to our Twitter or Facebook site”. What’s missing with that invite is the ability to collectively co-create potential solutions and generate ideas based on the challenges the investigation provides. We’re missing the power of our collective intelligence on the issue at hand. The outcome of the Mindhive challenge facilitated by Peter will form the basis of a 500-800 idea published on Mindhive, and where appropriate submitted to the ABC and other mainstream media. Mindhive allows for impact recognition by ORCID, uniquely identifying academic and other contributors, thus ensuring that you get credit for your work.

 

 

 

Challenge Opened: 04:19 AM, Sunday 13 May 2018
Challenge Closes: 01:30 PM, Friday 29 June 2018
Time to go: Closed

 

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The context

The range of Australian banking industry participants, the relative market share of those participants, the size of the Australian banking industry, the range of products offered and the profitability of the sector.

Key points:

a) Authorised Deposit-taking Institutions (ADIs) collectively hold around 55 per cent of the total assets of Australian financial institutions (as at the September quarter 2017), making up the largest part of the Australian financial system;

b) There has been a decline in the number of ADIs operating in Australia, largely as a result of the decrease in the number of credit unions following consolidation activity. Credit unions and building societies have also rebranded themselves as mutual banks, resulting in an increase in the number of domestic banks operating in Australia;

c) The major banks hold approximately three-quarters of total assets held by ADIs in Australia;

d) ADIs hold $4.6 trillion in assets, around two-and-a-half times the size of Australia’s $1.8 trillion nominal economy. Financial and insurance services is the largest contributor to real industry gross value added; and

e) Banks provide a wide range of products and services to Australian consumers and businesses. In particular, bank lending is a key source of external financing for SMEs and agricultural businesses in Australia.

Challenge Opened: 04:19 AM, Sunday 13 May 2018
Challenge Closes: 01:30 PM, Friday 29 June 2018
Time to go: Closed

Do you want to contribute to this Challenge?

Meet the Panel

Peter Grimbeek Statistics & Methods Counsellor
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Stephen Grey Associate Director
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Vern Hughes Director Civil Society Australia
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Thought Leader

Peter Grimbeek Statistics & Methods Counsellor
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Loris Semple Human Services Consultant
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Grant Spork Director
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Suzy Roden Consultant
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Bob Dick
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Simon Kaplan CEO
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Dario Bongiovanni Account Manager
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Stephen Grey Associate Director
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Bruce Muirhead Chief Executive Officer
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Janet Wight Director
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Mike Metcalfe Consultant
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Bill Wyatte Integrated Criminal Justice Governance and Program Manager
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Vern Hughes Director Civil Society Australia
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Mark Klein Principal Research Scientist
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Kevin Cox
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Glen Postle Honorary Professor - University of Southern Queensland
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Andrew Dunning
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Ben Novakovic Engineering Manager
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Isaac Parker
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