Michael West gives a very good summation of the current situation in the Australian financial marketplace. It's heartening to see somebody in mainstream media doing a proper job of chronicling this unfolding saga...  


Ultimately, ASIC should realise, as more and more of this comes out in the Senate Inquiry about its reluctance to exercise authority, that the very thing ASIC has been trying to maintain, confidence in the marketplace, will be badly damaged through revelations that ASIC has allowed all of this fraud to occur on its watch and has willfully turned a blind eye to it all. 

ASIC has worked on the philosophy that by keeping quiet on all this white collar crime, only a few old retirees will be hurt and, hey, what are they going to do about it?   But, in the end, it is the entire Australian financial marketplace that will pay, as consumers of all kinds begin to lose faith in Australian issued 'securities' as being a prudent investment choice. 

If that sentiment spreads to foreign investors, it has the potential to throw the national economy into a tailspin, meaning we can look forward to good ol' fashion austerity measures coming our way while the mess gets cleaned up, to make foreign investors feel safe to return. Although, there is a cynical school of thought that suggests the biggest attraction for many foreign investors since ASIC was established has always been the very fact that ASIC is prepared to play the role of a sleeping, toothless dog, so that they can get away with just about anything, over here. This risk however, should not deter those Senators from getting to the bottom of what they set out to discover and make their report to reflect their findings and just let the cards fall where they will. If the Senate Committee Report is to be worth the paper it will be written on, it will include recommendations that ASIC should be dissembled and brought back under direct government control. 

From a consumer perspective, that ASIC willingly issues licences to legal practices whose clients are financial institutions and knowingly allows them to hang out their shingles pretending to the public they are legitimate financial ombudsman, fair and independent, while totally misrepresenting the fact that they have no intention of ever actually helping a complaining consumer, but acting instead to run damage control measures for their real client, the respondent to the complaint, says it all, doesn't it? Of course, COSL and FOS clearly have fiduciary responsibilities to their financial members. Who could think otherwise?

ASIC cannot be trusted, in its twin roles, to provide both confidence and stability in the financial markets as well as to properly administer consumer protection legislation. The conflict of interest between the two roles is obviously massive. It should never have been given the powers and budget to administer consumer protection on top of its existing responsibilities, in the first place.

There should be one government body regulating the markets and another separate government body administering consumer protection and never the twain shall meet.