Competition in financial services

In the financial services sector, the failure of a single institution can have a compounding effect on the sector, and on national and global economies. In particular, there is systemic risk from inter-institution lending, and this effect is more complex in Australia due to the small number of major players. In retail banking in Australia, following a similar practice in most developed countries, if an unsecured creditor is a retail depositor, their deposit is insured by the government. That is, if a retail bank fails, the Federal Government will make the depositors whole. The regulatory system, particularly the prudential regulatory system, is designed to protect depositors’ and borrowers’ interests, and this protects the interest of the government. The effect is that regulatory policy on banking has prioritised stability in consideration of the sovereign risk associated with the risk of retail bank failure. However, this approach also creates a policy dilemma. The dilemma concerns the extent to which the retail banking sector can attain the benefits of the vigorous rivalry from effective and efficient competition, without unduly risking stability and the potential of a devastating call on the public purse. Specifically, in the context of effective and efficient competition, there is limited competitiveness in retail banking in Australia. This is reflected in the static state of market share between the four major banks, and very slow and marginal improvements gains even by strong second tier competitors. Furthermore, the retail banking sector’s capacity for product and service innovation is limited. Although the absence of vigorous rivalry is conducive to stability within the retail banking sector, it is likely to detract from the welfare of retail banking consumers. Furthermore, the level of innovation may not be as high as is feasible and barriers, including prudential regulatory barriers to entry or expansion, mean that the extent of rivalry is unlikely to change without some form of promotion of competition. The paper consequently makes a four-point recommendation for the removal of the ‘four pillars’ policy:  The four major banks are protected by an implicit government guarantee that impacts market operation with little observable benefit to consumers, and may be a source of consumer disutility.  The four pillars policy has prompted increased vertical integration within the sector, particularly in the area of mortgage products.  There are sufficient merger protections provided by Part IV of the Competition and Consumer Act 2010 (Cth).  Competition and contestability arise when there are reasonably low barriers to entry and exit from the sector. It is not clear that low barriers to entry exist in Australia, and evidence to support this view comes from the failure of international banks to gain a significant toehold in the retail banking sector in Australia. One deterrent to entry is the regulatory focus on the four pillars. The authors recognise that this position is at odds with the view of the Financial System Inquiry. However, the rationale in the report of the Inquiry was to prevent mergers, and the current competition law achieves this objective. The paper recommends two specific policies to promote competition in retail banking without the structural intervention that would otherwise be required to improve the intensity of competition in the retail banking sector:  Introduce bank account number portability. This would use ‘know your customer’ and central database systems in a similar form to those that have been used for mobile number portability in Australia for the last decade and a half.  Introduce customer access to data held by banks to allow third parties to compare bank offerings across all banks.  Significantly, these two recommendations are consistent with the productivity proposals issued by the UK Government in July 2015. The research paper also examines crowd equity funding as a disruptive force in the banking sector, and recommends that crowd equity funding be permitted with the following safeguards:  ASIC should take an active role in monitoring crowd equity funding and be willing to sue in case of fraudulent action.  Any intermediary online platform should have a financial services licence with limited duty of care.  There should be a cap for business raisings through crowd equity funding of $2 million in a 12-month period.  Crowd equity funding is a social phenomenon. Through its use of social media, it has attracted people who have previously never been interested in investing in companies. Instead of being feared, this interest should be nurtured through the promotion of investors’ financial education

Minor psychiatric disorders and working conditions in truck drivers

OBJETIVO: Estimar a prevalência de distúrbios psíquicos menores e identificar estressores associados entre motoristas de caminhão. MÉTODOS: Estudo transversal conduzido com 460 motoristas de caminhão de uma transportadora de cargas das regiões Sul e Sudeste do Brasil, em 2007. Os trabalhadores preencheram questionário com dados sociodemográficos, estilos de vida e condições de trabalho. As variáveis independentes foram condições de trabalho, incluindo estressores ocupacionais, satisfação e demanda-controle no trabalho. O desfecho avaliado foi a ocorrência de distúrbios psíquicos menores. Foram realizadas análises de regressão logística univariada e múltipla. RESULTADOS: A prevalência de distúrbios psíquicos menores foi de 6,1 por cento. Os estressores mais citados foram congestionamentos, controle de rastreamento e jornada extensa de trabalho. A alta demanda no trabalho, o baixo apoio social e a jornada extensa diária referidos pelos motoristas estiveram associados aos distúrbios psíquicos menores. CONCLUSÕES: O trabalho em jornadas extensas foi associado à ocorrência de distúrbios psíquicos menores, tanto na análise das condições gerais de trabalho quanto como fator referido como estressor pelos motoristas. A regulamentação da jornada de trabalho com limitação de horas de trabalho diário é, portanto, uma medida necessária para a redução da chance de desenvolvimento de distúrbios psíquicos menores em motoristasOBJECTIVE: To estimate the prevalence of minor psychiatric disorders and to identify associated stressors among truck drivers. METHODS: A cross-sectional study was conducted with 460 truck drivers from a cargo transportation company of the Southern and Southeastern regions of Brazil, in 2007. Workers completed a questionnaire about sociodemographic, lifestyle and working conditions data. Working conditions were the independent variables, including occupational stressors, job satisfaction and job demand-control. The outcome evaluated was the occurrence of minor psychiatric disorders. Multiple and univariate logistic regression analyses were performed. RESULTS: The prevalence of minor psychiatric disorders was 6.1 per cent. The most frequently reported stressors were traffic congestion, tracking control and extended working hours. High job demand, low social support and extended daily working hours, as reported by drivers, were associated with minor psychiatric disorders. CONCLUSIONS: Work involving extended working hours was associated with the occurrence of minor psychiatric disorders, both in the analysis of general working conditions and as a factor considered to be a stressor by drivers. Thus, regulation of working hours with focus on the limitation of the daily working hours is necessary to reduce the chance of developing minor psychiatric disorders in driver

Distúrbios psíquicos menores e condições de trabalho em motoristas de caminhão

OBJECTIVE: To estimate the prevalence of minor psychiatric disorders and to identify associated stressors among truck drivers. METHODS: A cross-sectional study was conducted with 460 truck drivers from a cargo transportation company of the Southern and Southeastern regions of Brazil, in 2007. Workers completed a questionnaire about sociodemographic, lifestyle and working conditions data. Working conditions were the independent variables, including occupational stressors, job satisfaction and job demand-control. The outcome evaluated was the occurrence of minor psychiatric disorders. Multiple and univariate logistic regression analyses were performed. RESULTS: The prevalence of minor psychiatric disorders was 6.1%. The most frequently reported stressors were traffic congestion, tracking control and extended working hours. High job demand, low social support and extended daily working hours, as reported by drivers, were associated with minor psychiatric disorders. CONCLUSIONS: Work involving extended working hours was associated with the occurrence of minor psychiatric disorders, both in the analysis of general working conditions and as a factor considered to be a stressor by drivers. Thus, regulation of working hours with focus on the limitation of the daily working hours is necessary to reduce the chance of developing minor psychiatric disorders in drivers.OBJETIVO: Estimar la prevalencia de disturbios síquicos menores e identificar estresores asociados entre conductores de camión. MÉTODOS: Estudio transversal conducido con 460 conductores de camión de una transportadora de cargas de las regiones Sur y Sureste de Brasil, en 2007. Los trabajadores llenaron cuestionarios con datos sociodemográficos, estilos de vida y condiciones de trabajo. Las variables independientes fueron condiciones de trabajo, incluyendo estresores ocupacionales, satisfacción y demanda-control en el trabajo. El resultado evaluado fue la ocurrencia de disturbios síquicos menores. Se realizaron análisis de regresión logística univariada y múltiple. RESULTADOS: La prevalencia de disturbios síquicos menores fue de 6,1%. Los estresores más citados fueron congestionamientos, control de rastreo y jornada extensa de trabajo. La alta demanda en el trabajo, el bajo apoyo social y la jornada extensa diaria referidos por los conductores estuvieron asociados a disturbios síquicos menores. CONCLUSIONES: El trabajo en jornadas extensas fue asociado a la ocurrencia de disturbios síquicos menores, tanto en el análisis de las condiciones generales de trabajo como el factor referido como estresor por los conductores. La regulación de la jornada de trabajo con limitación de horas de trabajo diario es, por lo tanto, una medida necesaria para la reducción de la probabilidad de desarrollo de disturbios síquicos menores en conductores.OBJETIVO: Estimar a prevalência de distúrbios psíquicos menores e identificar estressores associados entre motoristas de caminhão. MÉTODOS: Estudo transversal conduzido com 460 motoristas de caminhão de uma transportadora de cargas das regiões Sul e Sudeste do Brasil, em 2007. Os trabalhadores preencheram questionário com dados sociodemográficos, estilos de vida e condições de trabalho. As variáveis independentes foram condições de trabalho, incluindo estressores ocupacionais, satisfação e demanda-controle no trabalho. O desfecho avaliado foi a ocorrência de distúrbios psíquicos menores. Foram realizadas análises de regressão logística univariada e múltipla. RESULTADOS: A prevalência de distúrbios psíquicos menores foi de 6,1%. Os estressores mais citados foram congestionamentos, controle de rastreamento e jornada extensa de trabalho. A alta demanda no trabalho, o baixo apoio social e a jornada extensa diária referidos pelos motoristas estiveram associados aos distúrbios psíquicos menores. CONCLUSÕES: O trabalho em jornadas extensas foi associado à ocorrência de distúrbios psíquicos menores, tanto na análise das condições gerais de trabalho quanto como fator referido como estressor pelos motoristas. A regulamentação da jornada de trabalho com limitação de horas de trabalho diário é, portanto, uma medida necessária para a redução da chance de desenvolvimento de distúrbios psíquicos menores em motoristas

The power of the Australian Securities and Investments Commission to accept enforceable undertakings : aims and current practices

The enforceable undertaking is one of the many sanctions available to the Australian Securities and Investments Commission (“ASIC”). An enforceable undertaking is a promise enforceable in court. The alleged offender, known as the promisor, promises the regulator to do or not to do certain actions. The result achieved by the enforceable undertaking reflects the compromise that is agreed on by the parties involved. This sanction is widely used in the regulatory community for it allows regulators to reach plausible solutions to alleged offences without unduly spending the resources of their agencies or those of the courts. This article looks at the use of enforceable undertakings by ASIC. It observes the instances under which ASIC enters into an enforceable undertaking and the alleged offences that lead to the acceptance of an enforceable undertaking. The article also surveys the promises given in an enforceable undertaking and the goals that may be achieved by these promises. Finally, this article reflects on the action that may be taken by ASIC if an enforceable undertaking is not complied with. This article also considers the origins of the sanction and takes into account the enforceable undertakings accepted by ASIC from 1998 (the date this sanction became available to this regulator) to June 2007

Enforceable undertakings : an improved form of settlement

An enforceable undertaking is an administrative sanction available to a number of Australian regulators at both the Federal and State level. It is a promise enforceable in court. In an enforceable undertaking, the alleged offender, known as the promisor, promises the regulator (for the purpose of this thesis, the Australian Securities and Investments Commission (‘ASIC’)) to do or not to do certain actions. Such a sanction is the result of an agreement between the alleged offender and the regulatory agency. An enforceable undertaking is thus a form of settlement. By analysing the 286 enforceable undertakings accepted by ASIC over the last decade (1998-2008), this thesis considers whether an enforceable undertaking is an improved form of settlement and identifies the strengths and weaknesses of this sanction. For the purpose of comparison, the manner in which enforceable undertakings are used by other regulators such as the Australian Competition and Consumer Commission is also considered. Some of the criticisms levelled at settlements, such as issues relating to transparency and accountability, are referred to and an assessment is made as to whether such criticisms apply to enforceable undertakings. The study finds that an enforceable undertaking is a flexible sanction that provides the regulator with a creative way to deal directly with certain alleged contraventions of the law. Further, an enforceable undertaking may be deemed to be moderately restorative in nature. Accordingly, this sanction may provide, in certain instances, a better outcome than other remedies that are at the regulator’s disposal. Such a remedy has its own place in the Braithwaite’s enforcement pyramid. An enforceable undertaking is, in addition, more transparent than a settlement. Its terms are unlikely to be perceived as unreasonable either by the promisor or the victims of the alleged offender. Further, while the use of settlements raises issues of accountability, the fact that an enforceable undertaking is subject to judicial review and is enforceable in court provides a certain protection to the promisor. Ultimately, if the terms of an undertaking are unreasonable, it is unlikely for the courts to give such promises any legal effect. Lastly, to ensure compliance of the promisor with the terms of the undertaking, an effective monitoring system has to be in place. However, since ASIC is more reactive than proactive in relation to the monitoring of undertakings, such a monitoring system relies heavily on self-regulation by the promisors. The thesis concludes that the current system of monitoring enforceable undertakings has a number of flaws that should be taken into account by the regulator. In summary, an enforceable undertaking is an enhanced form of settlement, the use of which by regulators should continue and generally replace the use of other forms of settlements

Expansion of the powers of the Administrative Appeals Tribunal in relation to enforceable undertakings

Enforceable undertaking is one of the sanctions available to the Australian Securities and Investments Commission (ASIC). This penalty is considered as a quasi-administrative penalty by the Australian Law Reform Commission and it permits the corporate regulator to reach desired solutions that cannot be achieved by a court action. ASIC is the only authority that can decide to accept or reject entering into an undertaking and its decisions in that regard are not reviewable. This article looks at two decisions of the Administrative Appeals Tribunal (Donald v ASIC [2001] AATA 622 and Daws v ASIC [2006] AATA 321) forcing ASIC to enter into certain undertakings when the corporate regulator clearly rejected and refused to use this remedy

Enforceable undertakings in Australia and beyond

Enforceable undertaking is one of the many sanctions that are available to regulators. It is widely used in the regulatory community for it allows the regulators to reach plausible solutions to alleged offences without spending the resources of their agencies or the resources of the courts. The success of enforceable undertaking has been such that there seem to be a desire to allow other regulators to use this penalty. This article will observe the provisions of enforceable undertakings available to Federal and State regulators. It will also look at the agencies that are requesting the adoption of such a remedy. Lastly, it will observe if there are any similar penalties overseas

Enforceable undertakings : a new form of settlement to resolve alleged breaches of the law

Use of the 'court-enforceable undertaking' as a sanction available to Australian regulators - origin of the sanction of enforceable undertakings - the Australian Securities and Investments Commission (ASIC) policy in relation to enforceable undertakings - circumstances where enforceable undertakings are accepted - ASIC's enforcement of enforceable undertakings

Indigenous corporate governance in Australia and beyond

Indigenous Australians, like their counterparts around the world, have not consistently had their rights acknowledged and upheld since the earliest days of Western colonisation. From the concept of Terra Nullius to the forcible removal of indigenous children from their families, indigenous Australians have had to fight hard to have their rights recognised. International recognition of the rights of indigenous peoples is now widespread, with 150 countries endorsing the United Nations Declaration on the Rights of Indigenous Peoples since 2007. One of the rights acknowledged by the United Nations Declaration relates to the economic freedom that should be given to indigenous peoples. Such freedom will remain symbolic if governments around the world do not take steps to ensure that indigenous peoples can establish their businesses based on their own cultures and traditions. In Australia, for instance, the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (‘CATSI Act’) attempted to take such a step even prior to Australia’s endorsement of the United National Declaration. This statute was introduced with the aim of empowering indigenous Australians to run their businesses based on their culture and traditions. However, although this legislation may have high aspirations, it does not always achieve its objectives. This chapter considers the rights of indigenous Australians under the CATSI Act. The Australia position will also be compared with steps taken by other countries to provide economic freedom to indigenous peoples by allowing them to run their businesses based on their own cultures and traditions