Abstract
The recently concluded Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry presented evidence of malfeasance, malpractice, and unethical and criminal behaviour by the banks. This article analyses the narratives proffered by the banks that were reported on the front pages of Australian media during the Royal Commission. This article analyses the strategies of denial and neutralisation used by the banks, including literal denial (nothing happened), interpretive denial (something happened but it’s not what you think) and implicatory denial (it happened but action is not needed and/or possible), and provides insight into the ways powerful institutions and individuals intervene in, construct, and support moral and legal codes.
Acknowledgments
Many thanks to Benjamin Koh, Tracey Booth and David Carter for their insightful comments. Thank you also to Louisa Luong for her excellent research assistance.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Cohen (Citation2001).
2 Welch et al. (Citation2007), p 92.
3 Del Rosso (Citation2018), p 53; Hamm (Citation2007), p 259.
4 Whyte (Citation2016), p 165.
5 Norgaard (Citation2011); Rayner (Citation2012) p 107.
6 Henceforth the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry will be referred to in text as the Banking Royal Commission.
7 Hogg (Citation2013), p 113; Miller (Citation2018), p 248.
8 Dempsey and Sorrell (Citation2018) 7; Hogg (Citation2013), p 113.
9 Dempsey and Sorrell (Citation2018), pp 7-20.
10 Sorrell (Citation2018), p 20.
11 Rose and Sesia (Citation2013).
12 Royal Commission (Citation2019b).
13 Clarke et al (Citation2003); Krugman (Citation2009); MacAvoy and Millstein (Citation2004).
14 Dempsey (Citation2018), p 73; Hogg (Citation2013) p 113.
15 Benson et al (Citation2016) 1.
16 Sutherland (Citation1949).
17 Tombs and Whyte (Citation2015); Bakan (Citation2004).
18 Dempsey and Sorrell (Citation2018), pp 7-20.
19 Cohen (Citation2001).
20 Sykes and Matza (Citation1957), p 664.
21 Whyte (Citation2016), p 165.
22 McBarnet (Citation2006), p 1091.
23 Cohen (Citation2001), p 51.
24 Del Rosso (n 19).
25 Whyte (Citation2016), p 165.
26 Roy Morgan, ‘Australian Newspaper Readership,’ http://www.roymorgan.com/industries/media/readership/newspaper-readership.
27 The Sydney Morning Herald has increased cross-platform readership in the past six months and is now the top read news in Australia; Sydney Morning Herald, ‘Sydney Morning Herald readership hits 5 million, 1 million ahead of rivals,’ https://www.smh.com.au/business/companies/sydney-morning-herald-readership-hits-5-million-1-million-ahead-of-rivals-20181001-p5071a.html, October 2019.
28 Costanza-Chock (Citation2016), p 2321.
29 Greer (Citation2010), p 490.
30 Greer et al. (Citation2005), p 157; Jewkes (Citation2015); Levi (Citation2006), p 1037; Martin (Citation2019).
31 Levi (Citation2006), pp 1037-1057.
32 News Corporation owns newspapers in the United States, United Kingdom and Australasia and has substantial interests in television, broadcast satellite, cable, film, children’s books and the internet; Winseck (Citation2008), pp 34-39; Pusey and McCutheon (Citation2010), p 211; Allan (Citation2009); Compton (Citation2009).
33 Support for the Australian Liberal Party was shown in the recent national election; The Daily Telegraph, ‘Sob-story Bill sells mother short,’ https://www.dailytelegraph.com.au/blogs/tim-blair/sobstory-bill-sells-mother-short/news-story/382054a7d67489d39c440d10fcc926bd, 9 October 2019.
34 David et al (Citation2011), p 215.
35 ‘New CBA Chief Executive Purge of the Narev Executive Old Guard,’ Australian Financial Review, 27 March 2018.
36 The Australian, ‘We were wrong: Big Four chiefs,’ https://www.theaustralian.com.au/business/banking-royal-commission-we-were-wrong-say-the-big-four-chiefs/news-story/51210b169a9d49c426d49ce547931b82, April 21 2018.
37 Sydney Morning Herald, ‘Heartbreak at the hands of the banks’, April 4 2018.
38 Martin (Citation2019); Jewkes (Citation2015).
39 News.com.au, ‘Australia’s major banks call for ‘properly constituted inquiry’ into the financial services sector,’ https://www.news.com.au/finance/business/banking/australias-major-banks-call-for-properly-constituted-inquiry-into-the-financial-services-sector/news-story/ebac85c6474c092e629744a31d22aa5a, November 30 2017.
40 News.com.au, ‘Australia’s major banks call for ‘properly constituted inquiry’ into the financial services sector,’ https://www.news.com.au/finance/business/banking/australias-major-banks-call-for-properly-constituted-inquiry-into-the-financial-services-sector/news-story/ebac85c6474c092e629744a31d22aa5a, November 30 2017.
41 News.com.au, ‘Australia’s major banks call for ‘properly constituted inquiry’ into the financial services sector,’ https://www.news.com.au/finance/business/banking/australias-major-banks-call-for-properly-constituted-inquiry-into-the-financial-services-sector/news-story/ebac85c6474c092e629744a31d22aa5a, November 30 2017.
42 News.com.au, ‘Australia’s major banks call for ‘properly constituted inquiry’ into the financial services sector,’ https://www.news.com.au/finance/business/banking/australias-major-banks-call-for-properly-constituted-inquiry-into-the-financial-services-sector/news-story/ebac85c6474c092e629744a31d22aa5a, November 30 2017.
43 The Australian, ‘We were wrong: Big Four chiefs,’ https://www.theaustralian.com.au/business/banking-royal-commission-we-were-wrong-say-the-big-four-chiefs/news-story/51210b169a9d49c426d49ce547931b82, April 21 2018.
44 ABC News, ‘‘Malcolm Turnbull backflips on banking royal commission after big four call for inquiry to restore public faith,’ https://www.abc.net.au/news/2017-11-30/banking-royal-commission-announced-by-pm-after-big-four-letter/9209926, 30 November 2017.
45 The Australian, ‘We were wrong: Big Four chiefs,’ https://www.theaustralian.com.au/business/banking-royal-commission-we-were-wrong-say-the-big-four-chiefs/news-story/51210b169a9d49c426d49ce547931b82, April 21 2018.
46 ‘Big banks deny criminal conduct,’ Sydney Morning Herald, September 2018, pp 1, 3.
47 Australian Financial Review, ‘Hayne Royal Commission: NAB staff took cash bribes to ‘smash targets,’ https://www.afr.com/companies/financial-services/hayne-royal-commission-nab-staff-took-cash-bribes-to-smash-targets-20180312-h0xdfx, 12 March 2018.
48 Australian Financial Review, ‘Hayne Royal Commission: NAB staff took cash bribes to ‘smash targets,’ https://www.afr.com/companies/financial-services/hayne-royal-commission-nab-staff-took-cash-bribes-to-smash-targets-20180312-h0xdfx, 12 March 2018.
49 ‘Australian Financial Review, ‘CBA “knew” of illegal activities,’ Australian Financial Review, 2018.
50 Australian Financial Review, ‘Banking royal commission: AMP under attack,’ https://www.afr.com/companies/financial-services/banking-royal-commission-amp-under-attack-20180416-h0ytth, 16 April 2018.
51 The Australian, ‘AMP admits to misleading ASIC 10 times,’ https://www.theaustralian.com.au/business/financial-services/amp-admits-to-misleading-asic-10-times/news-story/9a43474bd076f0b2cc444f799d71f252, 9 October 2019.
52 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
53 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
54 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
55 Cohen (Citation2001), p 107.
56 Cohen (Citation2001), p 108.
57 ‘Big banks deny criminal conduct,’ Sydney Morning Herald, September 2018, pp 1, 3.
58 ‘Four Corners Program - Money for Nothing,’https://www.abc.net.au/4corners/money-for-nothing/10026944 23 July 2018, 23 July 2018.
59 ‘Watchdog boss call for purge of bank executives,’ Sydney Morning Herald, 2019; Under section 1041G of the Corporations Act it is a civil and criminal offence to a company to ‘engage in dishonest conduct in relation to a financial product or financial service’. Post the Royal Commission the definition of ‘dishonest’ was changed to remove the subjective requirement that the ‘person’ must know that the conduct was dishonest. It is now sufficient that conduct is dishonest if it is ‘dishonest according to the standards of ordinary people;’ Section 9 Corporations Act 2001 (Cth).
60 Del Rosso (Citation2018), p 53.
61 The Australian, ‘Banks enjoy Hayne bounce,’ https://www.theaustralian.com.au/news/banking-royal-commission-banks-enjoy-posthayne-bounce-on-sharemarket/news-story/f87d5d0c95489cee56b55f578ed202d2, 9 October 2018.
62 The Australian Financial Review, ‘NAB CEO Andrew Thorburn: ‘We do not believe they are criminal,’’ https://www.afr.com/companies/financial-services/nab-ceo-andrew-thorburn-we-do-not-believe-they-are-criminal-20180809-h13rfr, 9 October 2019.
63 McBarnet (Citation2006), p 1091.
64 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
65 ‘Watchdog boss call for purge of bank executives,’ Sydney Morning Herald, 2019.
66 ‘Watchdog boss call for purge of bank executives,’ Sydney Morning Herald, 2019.
67 Tesco v Nattrass [Citation1972] AC 153.
68 Diamantis (Citation2019), p 319.
69 Hogg (Citation2013), p 113.
70 Gilchrist (Citation2012), p 1.
71 Crofts (Citation2013).
72 Kahan (Citation1998), p 1621.
73 Gilchrist (Citation2012), p 1.
74 Australian Financial Review, ‘AMP CEO Craig Meller apologies to advisers: ‘This isn’t the AMP you know,’ https://www.afr.com/opinion/amp-ceo-craig-meller-apologies-to-advisers-this-isnt-the-amp-you-know-20180419-h0yzty, 9 October 2019.
75 Norgaard (Citation2011).
76 Del Rosso (Citation2018), p 53.
77 For an analysis of the preference for a ‘bad apple’ over recognition of systemic criminality see Hamm (Citation2007), p 259
78 For an analysis of whether or not bankers can be folk devils see David et al (Citation2011), p 215.
79 Jewkes (Citation2015).
80 Greer et al. (Citation2005), pp 157-182.
81 Lacey (Citation2001), p 350.
82 Sydney Morning Herald, “‘Temper your sense of justice:’ How then-CBA chif Ian Narev shot down Comyn’s plan,” https://www.smh.com.au/business/banking-and-finance/i-was-insufficiently-persuasive-comyn-s-attempt-to-stop-insurance-sales-rebuffed-by-then-cba-chief-20181120-p50h3c.html, 12 November 2018.
83 Australian Financial Review, ‘CBA chief first to face public flogging,’ https://www.theaustralian.com.au/business/cba-chief-matt-comyn-first-to-face-royal-commission-public-flogging/news-story/0180a088bfe4e6503242113c2bd2020c, 9 October 2019.
84 ‘New CBA Chief Executive Purge of the Narev Executive Old Guard,’ Australian Financial Review, 27 March 2018.
85 Australian Financial Review, ‘‘Battered CBA leaderhip pushes back on sacking calls,’ https://www.afr.com/companies/financial-services/battered-cba-leadership-pushes-back-on-sacking-calls-20180501-h0zhyi, 1 May 2018.
86 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
87 ‘CBA: We put profits ahead of people,’ Sydney Morning Herald, 2018.
88 Torpey (Citation2003), pp 1-34.
89 Olick (Citation2007).
90 Veitch (Citation2007).
91 Royal Commission (2019).
92 The Sydney Morning Herald, ‘Hayne unleashes on NAB boss and chairman’ https://www.smh.com.au/business/banking-and-finance/hayne-unleashes-on-nab-boss-and-chairman-20190204-p50vmy.html, 4 February 2019.
93 The Sydney Morning Herald, ‘Hayne unleashes on NAB boss and chairman’ https://www.smh.com.au/business/banking-and-finance/hayne-unleashes-on-nab-boss-and-chairman-20190204-p50vmy.html, 4 February 2019.
94 The Australian, ‘Banks enjoy Hayne bounce,’ https://www.theaustralian.com.au/news/banking-royal-commission-banks-enjoy-posthayne-bounce-on-sharemarket/news-story/f87d5d0c95489cee56b55f578ed202d2, 9 October 2018.
95 The Australian, ‘Banks enjoy Hayne bounce,’ https://www.theaustralian.com.au/news/banking-royal-commission-banks-enjoy-posthayne-bounce-on-sharemarket/news-story/f87d5d0c95489cee56b55f578ed202d2, 9 October 2018.
96 Box (Citation1983); Whyte (Citation2016), p 165.
97 ‘CBA: We put profits ahead of people,’ Sydney Morning Herald, 2018.
98 Whyte (Citation2016), p 165.
99 ‘CBA: We put profits ahead of people,’ Sydney Morning Herald, 2018.
100 Sydney Morning Herald, ‘Scott Morrison slams banking royal commission proposal as nothing more than a ‘populist whinge’’https://www.smh.com.au/politics/federal/scott-morrison-slams-banking-royal-commission-proposal-as-nothing-more-than-a-populist-whinge-20160807-gqms5y.html, 9 October 2019.
101 Sydney Morning Herald, ‘How Scott Morrison changed his tune on the banking royal commission,’ https://www.smh.com.au/politics/federal/how-scott-morrison-changed-his-tune-on-the-banking-royal-commission-20180420-p4zaoa.html, 9 October 2019.
102 Sydney Morning Herald, ‘PM urges caution on bank reform,’ https://www.smh.com.au/politics/federal/scott-morrison-warns-against-rash-response-to-banking-royal-commission-20190130-p50uo1.html, 9 October 2019.
103 Sydney Morning Herald, ‘PM urges caution on bank reform,’ https://www.smh.com.au/politics/federal/scott-morrison-warns-against-rash-response-to-banking-royal-commission-20190130-p50uo1.html, 9 October 2019.
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105 Tombs and Whyte (Citation2015).
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109 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
110 Sorrell (Citation2018), pp 20-36.
111 Hiller (Citation2013), p 287; Whyte (Citation2016), p 165; Tombs and Whyte (Citation2015).
112 ABC News, ‘Moneybags,’ https://www.abc.net.au/news/2016-04-19/moneybags/7340138, 9 October 2019.
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114 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
115 Sydney Morning Herald, ‘CBA admits to putting profits over customers in historic grilling,’ https://www.smh.com.au/business/banking-and-finance/cba-admits-to-putting-profits-over-customers-in-historic-grilling-20181119-p50h00.html, 19 November 2018.
116 ‘Stop being bastards’: how the royal commission could reform banks,’ https://www.smh.com.au/business/banking-and-finance/stop-being-bastards-how-the-royal-commission-could-reform-banks-20180921-p50577.html, 9 October 2019.
117 Miller (Citation2018), pp 248-269.
118 Hogg (Citation2013), pp 113-131.
119 The idea that institutions are ‘too big to fail’ was demonstrated in the GFC. This was an answer by Attorney-General Eric Holder to the Senate Judiciary Committee; The New York Times, ‘Realities Behind Prosecuting Big Banks,’ https://dealbook.nytimes.com/2013/03/11/big-banks-go-wrong-but-pay-a-little-price/, 9 October 2019.
120 Miller (Citation2018), p 248.
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122 ABC News, ‘A royal commission into banks could restore our faith,’ how the royal commission could reform banks,’ : https://www.abc.net.au/news/2016-04-11/verrender-a-royal-commission-into-banks-could-restore-our-faith/7314842, 9 October 2019
123 Fisher (Citation2009).
124 Fisse and Braithwaite (Citation1993); Gilchrist (Citation2012), pp 1-56; Gunningham (Citation1987), p 59; Wells (Citation2014), p 505.
125 Dempsey and Sorrell (Citation2018), p 7.
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Penny Crofts
Penny Crofts is Faculty of Law, University of Technology Sydney.