“The managing director of Market Economics, Stephen Koukoulas, believes punishments need to be placed more squarely on bank leadership.
Koukoulas said simply fining banking institutions, while necessary, did little to deter misconduct.
“We’ve seen massive fines in the UK and the US, tens of billions of dollars in fines. Look at them now, they’re doing fine. It’s 12 months profit, it’s six months profit. It’s neither here nor there,” he said.
“But the individual who put the bank or the economy in that position is still there.”
He predicts there will be a period of self-imposed change in the sector, particularly around the payment of bonuses and commissions. Some signs of change are already emerging. There’ll also be a period of further regulatory change, Koukoulas said, when the royal commission delivers its report.
He said customers may drift away from the big four, but that trend will be tempered by their market dominance and the cost and effort required to change.
“There’s not a lot of alternatives we can turn to,” he says.”