To: Bank corporate affairs executives
From: Banking Day
Subject: South America
Last Friday, Commonwealth Bank CEO Ralph Norris suggested proposed banking reforms were similar to "cargo-cult-type policies in places like Argentina". A week earlier, the ANZ's Mike Smith said of Coalition Treasury spokesman Joe Hockey: "It would appear he's been taking economics lessons from Hugo Chavez." Based on this evidence, your bank CEO will probably soon also develop a desire to publically compare Australia's banking debate to that of a South American country. You should talk him or her out of it. Here's how.
First, impress on your CEO that most Australians know almost no South American economic history. In a multiple-choice questionnaire, most Australians would guess Hugo Chavez is a Puerto Rican pop singer, not a demagogic socialist president of Venezuela.
Second, suggest to your CEO that if he or she feels compelled to express deep concern over the South-Americanisation of Australian public policy doing it when announcing the latest profit is the wrong time. The ANZ's Mike Smith showed why. To
quote Nine Network's Laurie Oakes:
"Watching the ANZ bank chief, Mike Smith, on television attacking Joe Hockey it was just about impossible not to take the shadow treasurer's side ... He could not have done more to help Hockey's anti-bank case if he had tried."
Third, remind your CEO that Joe Hockey doesn't act like Hugo Chavez. Hockey's
speech containing his "nine-point plan" [LINK: http://bit.ly/dqA80z ] was impeccably economically orthodox. No less an authority than Professor Ian Harper, architect of 1997's Wallis Inquiry, called Hockey's speech "considered and erudite".
Fourth, note that Treasurer Wayne Swan isn't Hugo Chavez either. He's just about the closest thing to a friend in Canberra that the banking industry has right now, and he's trying (as Laurie Oakes pointed out at the weekend) to approach banking regulation in a responsible manner.
After all this, your CEO will probably ask why bankers can't use the South American hype when
resource companies did just that during the mining tax debate.
Your answer: the miners could get away with it. The biggest and noisiest bits of the media (News Ltd and Sydney talkback radio) were on the miners' side, and the average Australian householder never needs to buy a shipload of iron ore.
You need to help your CEO understand that bankers are in exactly the opposite position. Australian households pay a decent slice of their monthly salary to banks. And, as you know, the media are feral over banks right now. You can explain the problem using clippings and transcripts. Start with last Thursday's
Herald Sun - the one that declared "War On Banks" and accused poor Ralph Norris of "pilfering his customers' savings".
You might also transcribe the piece of Thursday's Alan Jones monologue where
Jones suggested Sir Ralph Norris might be called "Cur Ralph Norris".
Bank CEOs are angry about the public debate and want to say something dramatic. But whatever they say should make the debate better, not worse.