DEAR MR MURRAY … Here is how to fix our financial system
Beef up consumer protection in the finance industry. Ban banks from wealth management activities. Make product disclosure statements less confusing.
These are some of the messages from top economists to David Murray, the former bank boss who is now in charge of the Abbott Government inquiry into Australia’s financial system.
Fairfax Media’s BusinessDay asked a panel of experts to nominate what they thought the inquiry’s top recommendations should be, publishing their responses recently.
While there was some disagreement over the specifics, a recurring theme was the need to introduce measures to protect consumers from complex or inappropriate financial products.
Stephen Anthony from Macroeconomics said product disclosure statements had become “indecipherable”.
Bill Mitchell from Charles Darwin University argued banks should be banned from wealth management, restricted instead to loans, deposits and payments services.
Jakob Madsen from Monash University recommended requiring home buyers have deposits of 20 to 30 per cent to protect them from downturns in the property market.
In the wake of the collapse of financial advice companies such as Storm Financial, the Government has stated its desire for the inquiry to be a “root and branch examination of the nation’s financial system”. An interim report is due in September.
What’s your message to David Murray? Have you been burnt by banks or other financial services providers? Do you trust the Big Banks to manage your savings?
