“If the NAB was managing itself well, what it would do is the chairman would go first and then a new chairman would come in, and would appoint the CEO,” said Mr Costello, who is also chairman of Nine Entertainment, the publisher of The Australian Financial Review.
“I don’t think its good practice for an ongoing chair to appoint the CEO because any CEO coming in would want to know who the chairman is going to be, that they will be working with.”
Mr Costello noted that the Commonwealth Bank had also changed its leadership, and said both new chairman Catherine Livingstone and chief executive Matt Comyn had “shown intend to try change things”.
Not a matter of a ‘few milion here’
He said the other big banks, ANZ and Westpac, had “fared better” and said their leadership teams “should be given every opportunity” to rectify issues identified by the commission.
But Mr Costello said that in the case of charging customers fees for no service, or in the case of the Commonwealth Bank, not complying with money laundering reporting requirements, the banks were not complying with the law.
“Ultimately the chairs and the CEOs, chastened by this experience, have got to say compliance with the law is a much greater priority and they are going to enforce it.”
Mr Costello also took aim at the regulators for failing to police the banks and enforce the law.
“The easy thing for the regulators to say is ‘we could have done it all, we just didn’t have enough money’.”
“To be frank, you have to look at these regulators that were being funded what they did with the money they did have.”
Mr Costello said he did not believe the lack of enforcement was because the regulators “lacked a few million here, and a few million there.”
“There was an attitude and Hayne has found it. They didn’t want to take on enforcement for whatever reason.”
“It is too easy to say it was all the fault of [lack of] money. I think it was a cultural problem inside of the regulators.”