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Adele Ferguson’s dismissal of the risks of a royal commission to international confidence in the Australian banking system seriously misses the point (‘‘Counting the cost of banks breaking bad’’, September 17-18).
Australia’s is a small economy that relies on raising money from overseas to fund investment and borrowing. As we saw during the global financial and European debt crises, at times of volatility and heightened nervousness in international markets, confidence in banking systems determines the costs of this money and, in extreme circumstances, whether it is available at all.
Given the current fragility of international markets and major economies, a royal commission would risk undermining confidence in the policies of successive Australian governments, our regulators and the management of our banks.
Running this risk is unnecessary. Banks acknowledge the problems in the industry and are taking action now to fix them.
CEO, Australian Bankers' Association