Banking

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<div>Australia's banks are mostly funded by domestic deposit these days, at nearly 60 percent of their funding composition.</div>
<div> </div>
<div>Equity accounts for a fair share of the remainder too. </div>
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<div>But what about their debt funding costs?</div>
<div> </div>
<div>Last week's Statement on Monetary Policy took a short look at this. </div>
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<div>And the answer is that debt funding costs have kept on falling in 2016.</div>
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<div>And what's more they will continue to do so in the near future. </div>
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<div><a href="/images/2016/11/07/RBA1.jpg" target="_blank">Click to enlarge</a></div>
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<div class="separator"><img src="/images/2016/11/07/RBA1.jpg" alt=""></div>
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<div><span>After cuts to the cash rate May and August, the major banks’ debt funding costs also declined. </span></div>
<div><span> </span></div>
<div><span>The cost of short-term debt is now under 2 per cent (down from well above 6 per cent in 2007).</span></div>
<div><span> </span></div>
<div><span>Meanwhile, the marginal cost of long-term debt is a bit above 3 per cent.</span></div>
<div><span> </span></div>
<div><span>It is true that since the beginning of the year, these costs have declined by a little less than the cash rate.</span></div>
<div><span> </span></div>
<div><span>This was mainly because of changes to term deposit rates. </span></div>
<div><span> </span></div>
<div><span>But overall the difference was not material.</span></div>
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<div><span>And now funding costs are expected to fall further, since the cost of new wholesale debt remains below the cost of outstanding debt. </span></div>
<div><span> </span></div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
<p><em> </em></p>
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Funding costs keep falling: Pete Wargent

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<span>Contrary to what you might think, and despite recent upward pressures, bank funding costs fell in 2015. </span><br><span><br></span><span>The Reserve Bank of Australia (RBA) took a detailed look at this in its ever-enlightening Bulletin this week.</span><br><span><br></span><span>The funding composition of Aussie banks is made up of liabilities, comprised predominantly of domestic deposits which today make up a greater share of total funding than was the case prior to the financial crisis. </span>
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<div><span> </span></div>
<div><span>The remainder of banks' funding composition comprises short term debt, long term debt, equity, plus now a small amount of securitisation. </span></div>
<div><span> </span></div>
<div><span>Domestic deposits, which are a more stable form of funding, made up close to a 60 per cent share of the total by 2014, but this allocation has declined a little lately as the cost of wholesale debt became cheaper, and as banks raised equity in response to forthcoming changes to prudential regulation. </span></div>
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<div><span>Here's that composition in a chart provided by the RBA:</span></div>
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<div><a href="/images/2016/03/21/f2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div class="x_separator"><img src="/images/2016/03/21/f2.jpg" alt=""></div>
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<strong><span style="text-decoration: underline;"><span>Debt funding costs</span></span></strong><br><span><br></span><span>While the official cash rate acts as an important "anchor" for bank funding costs, changes in the returns or compensation demanded by investors to hold debt can also influence banks' funding costs appreciably.</span>
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<div><span> </span></div>
<div><span>Debt funding costs for major banks fell materially by 70 basis points ("bps") in 2015, in part driven by 25bps interest rate cuts delivered in February and May respectively. </span></div>
<div><span> </span></div>
<div>
<span>Most of the decline in funding costs relative to the cash rate took place in the first half of the last calendar year, with costs reasonably stable in the second half of 2015.</span><br><span><br></span><span>From yonder Bulletin, a chart of said debt funding costs once more, depicting the large decline in debt funding costs since 2008. </span>
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<div class="x_separator"><a href="/images/2016/03/21/f3.jpg" target="_blank">Click to enlarge</a></div>
<div class="x_separator"><img src="/images/2016/03/21/f3.jpg" alt=""></div>
<div><span> </span></div>
<div><span>Notably markets are pricing a relatively higher weighted average debt funding cost for the non-major Aussie banks, a dynamic which did not exist so clearly before the financial crisis.</span></div>
<div><span> </span></div>
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<span><strong><span style="text-decoration: underline;">Wholesale funding</span></strong></span><br><span><span><br></span><span>In respect of wholesale funding, the volume of bank bond issuance in the last calendar year was pretty much in line with the year which preceded it, though banks issued a bit less in covered bonds and residential mortgage-backed securities (RMBS). </span></span>
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<div><span> </span></div>
<div><span><span>In terms of the actual mix of wholesale funding, that didn't change all that much either through last year, though a</span> bit of shift from offshore long term to short term debt did see a slight reduction in funding costs for the majors, according to the RBA:</span></div>
<div><span> </span></div>
<div><span><strong>"Through 2015 declines in wholesale funding rates and the rolling over of existing higher-rate funding lowered the funding costs of major banks by 8 basis points more than the reductions in the cash rate".</strong></span></div>
<div><span> </span></div>
<div>
<span>Overall, then, the cost to banks of issuing new wholesale debt fell significantly at the beginning of 2015, and this lower level was sustained through most of the year. </span><br><span><br></span><span>This gradually flowed through to outstanding wholesale funding costs as the new cheaper debt replaced higher cost funding reaching maturity.</span>
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<div><span> </span></div>
<div><span>Towards the end of 2015, the cost of issuing <strong><span style="text-decoration: underline;">new</span></strong> debt increased, which is angle that all the "bank funding costs are soaring" articles are coming from, although seen in context, funding costs remain a good deal lower than they have been over the years. </span></div>
<div><span> </span></div>
<div><span>Summarily, yields on new short term debt increased a bit to be higher than those on outstanding short term debt, but the cost of new long term debt was a little below the cost of corresponding outstanding debt.</span></div>
<p><a href="/images/2016/03/21/Funding.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/21/Funding.jpg" alt=""></p>
<div><span>Although equity tends to be a relatively small share of banks’ aggregate balance sheets (at about 6 to 7 per cent), equity is generally speaking more expensive than debt, thus relatively small shifts in equity funding can have proportionately large effects on total funding costs.</span></div>
<div><span> </span></div>
<div><span>The major banks raised a significant amount of equity in 2015, in anticipation of upcoming changes to prudential regulation, about $21 billion worth in total, according to the RBA.</span></div>
<div><span> </span></div>
<div><span><strong><span style="text-decoration: underline;">Lending rates</span></strong></span></div>
<div><span> </span></div>
<div><span>As for mortgage rates? Housing rates generally declined in line with the cash rate in the first half of last year, with the average outstanding interest rate on mortgages falling by about 50bps.</span></div>
<div><span> </span></div>
<div><span>As has been well covered in the financial media, in the second half of the year banks tweaked their lending rates such that the average outstanding housing interest rate for investor loans was only moderately lower over 2015, while rates for owner-occupiers declined by about 30bps. over the year. </span></div>
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<div><a href="/images/2016/03/21/F4.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2016/03/21/F4.jpg" alt=""></span></div>
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<span>The implied spread of major banks - that being the difference between average lending rates and debt funding costs - increased by around 20bps over 2015, this </span><span>change driven by a combination of the decline in average funding costs relative to the cash rate and an increase in the average lending rate. </span>
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<div><span> </span></div>
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<span>However, the Reserve Bank noted that lending rates and debt funding costs do tend to move in line with each other in the longer run.</span><br><span><span><br></span><span><strong><span style="text-decoration: underline;">The wrap</span></strong></span></span><br><span><span><br></span>Despite a moderate increase in debt funding costs recently and a range of equity raisings, funding costs are still lower than they were.</span><br><span><br></span><span>With global interest rates so low, futures markets still expect the cash rate in Australia to be cut again by November this year, although banks may elect to retain a portion of any 25bps cut delivered in order to shore up their balance sheets further. </span><br><span><br></span><span>Alternatively banks may looking at increasing mortgage rates a little via out of cycle hikes.</span>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Bank funding costs declined in 2015: Pete Wargent

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<p><span>We have been advising our clients for some time that the banks have become harder to deal with, than this time last year. Since those comments we have introduced internal measures to help our buying clients AND the banks have put investor rates up. Ok, the banks are being prudent, aren’t they?</span></p>
<p><span>Yes, but hey, there is a bigger picture here that the banks and the government are not seeing or maybe are choosing to ignore.</span></p>
<p><span><strong>Are banks being fair to locals?</strong></span></p>
<p><span>Question:  <strong>Are our local banks involved in some form of inadvertent, bizarre reverse prejudice by pulling interest rate and other restrictive lending levers for locals.</strong></span></p>
<p><span>As any local buyer will acknowledge, it is already very difficult to compete against the huge Asian inflow of money. Asian buyers have more financial options eg currency swapping, than the local Australian buyers do.</span></p>
<p><span>Are we seeing a repeat of the 1960s where the banks wanted to encourage new building, so they made it easy for locals to borrow to build new in Doncaster, while making it more difficult for locals to borrow and buy second hand in Albert Park? The Greek and Italian migrants who at the time had more money raising abilities than the locals, took full advantage of this when walking off the boat and bought en masse in Albert Park, Port Melbourne and Middle Park with minimal competition.</span></p>
<p><span>The Asian buying influx is a lot, lot bigger now than the Greek and Italian influx of those times.</span></p>
<p><span>Since the FIRB changes of 2009 which opened and never shut the floodgates to overseas investment, large amounts of land and huge numbers of established homes in Inner Melbourne have been and are continuing to be bought by overseas investors. This seems to be what the Australian governments of both political persuasions want – ok, that is the government’s call – that’s not the point of this article – that’s for another time.</span></p>
<p><span>Our policy at James is clear – we act for local and overseas clients without internal policy bias.</span></p>
<p><span>Our point is that the locals (your children and my children) <strong>need to be on as level a playing field as possible when it comes to being able to compete against buyers from Asia.</strong></span></p>
<p><span>Otherwise the banks/governments maybe subjecting some of our clients, locals, your/my children etc to a form of bias which we find totally unacceptable and outside our values of Australian fair play.</span></p>
<p><span>The banks, for no doubt very good reasons in their mind, are making it harder for locals to buy – but they may not slow the surge, as they intend. All they may do, is make it a lot easier for overseas buyers to buy near schools, buy in good streets, buy the established homes; as fewer local buyers have the ability to compete against the more sophisticated money from China and other Asian countries.</span></p>
<p><span><strong>We think this is seriously unfair on local Australians if it plays out as it looks like it may.</strong></span></p>
<p><span>Local banks need to be helping local buyers, not making it harder – guys, it’s already bloody hard enough for local buyers.</span></p>
<p><span>When are people of influence going to stand up for our children and for local buyers – who want to live locally.</span></p>
<p><span><strong>If the government and banks want the market to ease, go to the source of the creation – huge and unabated overseas demand.</strong></span></p>
<p><span>Banking leaders please look at what you may be inadvertently doing if you carry on your latest policy directions.</span></p>
<p><span><strong>This current market is not being driven by local interest rates</strong> – this current market is being driven by overseas demand and if you continue to weaken the local competition by restricting their ability to borrow (which no doubt is based on good intentions); all you may be doing is making it even easier for overseas buyers to buy, while making it harder for some of our clients, locals and our/your children to buy.</span></p>
<p><span><strong>Is that fair? No, it is not fair.</strong></span></p>
<p><span><em>Mal writes weekly auction reports, advice and in-depth market analysis on</em><strong><em> <a href="https://www.jamesbuyeradvocates.com.au/" target="_blank">James' website</a></em><span>.</span></strong></span></p>
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Our banks are not being fair on local buyers: Mal James

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<p>GUEST OBSERVATION</p>
<p>The leaders of our banks and financial institutions are seen as the most self-serving in the nation, according to a national survey undertaken by researchers at Swinburne University of Technology.</p>
<p>More than a third (35.4%) of respondents believe banking and financial institutions show “no leadership for the greater good”. This score is slightly worse than public perceptions of the Federal Government, substantially worse than religious institutions and significantly worse than trade unions.</p>
<p>The results, from a nationally representative sample of 1,000 Australians, also repudiate the <a href="https://www.ausbanking.org.au/media/media-releases/media-release-2018/banks-making-progress-in-delivering-better-customer-outcomes" target="_blank">Australian Banking Association’s claim</a> a year ago that “Australians believe banks are heading in the right direction”.</p>
<p>And given this survey was done in December 2018, before the <a href="https://financialservices.royalcommission.gov.au/Pages/default.aspx" target="_blank">Banking Royal Commission</a> had completed its work exposing misconduct in the financial services sector, it’s likely a future poll will show even greater community distrust of bankers.</p>
<p><strong>Transparency and accountability are crucial</strong></p>
<p>Our findings come from the initial results of the Australian Leadership Index, a new quarterly survey from the Swinburne Business School that measures and tracks community perceptions and expectations of leadership for the greater good across 13 societal institutions.</p>
<p>The index won’t be officially published until later in the year. But given the important public discussion about corporate leadership in the wake of the <a href="https://treasury.gov.au/publication/p2019-fsrc-final-report/" target="_blank">final report</a> of the banking royal commission, we think it’s useful to share a snapshot of our findings.</p>
<hr>
<p><iframe style="border: none;" src="https://datawrapper.dwcdn.net/fXFqO/1/" frameborder="0" width="100%" height="400"></iframe></p>
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<p>Consistent with other <a href="https://www2.deloitte.com/au/en/pages/financial-services/articles/deloitte-trust-index-banking-survey?utm_source=wp&amp;utm_medium=blog&amp;utm_campaign=fsi-deloitte-trust-index-2018&amp;utm_content=web" target="_blank">studies</a> that highlight the importance of transparency and accountability to perceptions of trust, our research confirms the importance of these attributes to perceptions of leadership for the public good.</p>
<p>From a community perspective, leadership for the greater good occurs when leaders demonstrate high ethical standards, when they demonstrate transparency and accountability for their positive and negative impacts, and when they seek to balance the interests of multiple stakeholders, including the wider community in which their institutions are nested.</p>
<p>So, leadership for the greater good is reflected in what value leaders create, how they create value, and for whom they create value.</p>
<p>Unhappily, banking leaders are found wanting on all counts.</p>
<p><strong>The importance of how value is created</strong></p>
<p>But other institutions are also found wanting, with our results revealing a generalised pessimism about Australian leadership.</p>
<p>Our survey results shed light on where the public think leaders are failing and what the community expects of leaders and their institutions to serve the greater good.</p>
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<p><iframe style="border: none;" src="https://datawrapper.dwcdn.net/6MnTr/2/" frameborder="0" width="100%" height="400"></iframe></p>
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<p>Notably, creating economic value is not a highly regarded aspect of leadership for the greater good. This is not to say it is unimportant. But on its own it is insufficient.</p>
<p>What looms largest in the public mind when thinking about the greater good is the social value that institutions create, how ethically they create this value, and their transparency and accountability for positive and negative impacts.</p>
<p>Our research demonstrates that leadership for the greater good is as much about <em>how</em> leaders create value for their stakeholders — from their employees to their customers to society-at-large — as it is about <em>what</em> value they create and <em>for whom</em> they create value.</p>
<p>It’s not hugely complicated.</p>
<p>And yet, as revealed by the endless, unedifying parade of misconduct in government, business, religious, sporting and other civil society institutions, community standards and expectations are too often observed in the breach.</p>
<p>In the wake of the banking royal commission, the Australian community has a golden opportunity for a thoroughgoing discussion about the leadership we need to protect and enhance the public interest.</p>
<p>We hope the Australian Leadership Index will contribute to that discussion, by making all our data freely accessible through a new data visualisation platform. This will enable easy tracking of how institutions are performing according to public perceptions of their impact on the public good.</p>
<p>Wise leaders focus on the greater good. It behoves all leaders to create this new culture of public leadership.<img src="https://counter.theconversation.com/content/111346/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><em><strong>Samuel Wilson</strong>, Senior Lecturer in Management, Swinburne University of Technology</em></p>
<p><em><strong>Jason Pallant</strong>, Lecturer of Marketing, Swinburne University of Technology<br></em></p>
<p><em><strong>Timothy Colin Bednall</strong>, Senior Lecturer in Management, Fellow of the APS College of Organisational Psychologists, Swinburne University of Technology</em></p>
<p><em>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/one-third-of-australians-think-banks-do-nothing-for-the-greater-public-good-111346" target="_blank">original article</a>.</em></p>
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One-third of Australians think banks do nothing for the greater public good

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<p>EXPERT OBSERVERS</p>
<p>Most of the economists polled think better regulation can make banks put customers first. The rest think it will need more.<span class="attribution"><span class="source"><br></span></span></p>
<p>After three years and 35 polls, the Economic Society of Australia has received its first-ever <a href="http://esacentral.org.au/nep-polls-and-articles-item/33205/bank-royal-commission-ii/?type_fr=452" target="_blank">unanimous response</a> to a survey question.</p>
<p>It asked just over 50 of Australia’s leading economists to respond to this statement:</p>
<p>There is no way to significantly increase the degree to which Australian retail banks act in the interests of consumers.</p>
<p>Twenty did. All rejected the proposition that nothing could be done. But there was widespread disagreement about what should be done.</p>
<p>Most thought that regulations should be tightened and better enforced.</p>
<p><a href="http://esacentral.org.au/national-economic-panel-item/15794/matthew-butlin/?type_fr=369" target="_blank">Mathew Butlin</a>’s comments typify this “more regulation” approach:</p>
<p>The incentive structures for bank staff, from the top down, play a key role in shaping behaviour. A more complete set of performance measures linked to remuneration that strongly penalises behaviour not in the consumer interest would provide stronger incentives for better behaviour, especially when linked with reliable information on non-compliance going to management and ultimately the bank board and a requirement for both to take action.</p>
<p>A smaller group openly doubted that better regulations would help, because they were not confident that the current crop of regulators or politicians would be able to devise and properly enforce them.</p>
<p><a href="http://esacentral.org.au/national-economic-panel-item/15810/allan-fels-ao/?type_fr=369" target="_blank">Allan Fels</a> gave the most damning response (with the highest word count) saying what was needed - among other things - was a “radical improvement in the performance” of the two main regulators, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.</p>
<p>In particular they need a change of culture. This will prove to be harder to do than it sounds. People have been talking for over twenty years about the ASIC and APRA culture needing improvement.</p>
<p><a href="http://esacentral.org.au/national-economic-panel-item/16039/geoff-kingston/?type_fr=369" target="_blank">Geoffrey Kingston</a> called for mandatory minimum sentences for financial crimes, arguing that the courts were complicit in the maintenance of financial crimes by being reluctant to jail white-collar criminals.</p>
<p>Kingston and <a href="http://esacentral.org.au/national-economic-panel-item/16049/joaquin-vespignani/?type_fr=369" target="_blank">Joaquin Vespignani</a> pointed to the monopoly power of the big four banks before then raising the hope that the “big data” revolution would democratise banking and re-empower consumers, an idea at the heart of the government’s <a href="https://www.accc.gov.au/focus-areas/consumer-data-right" target="_blank">Consumer Data Right initiative</a>.</p>
<p>Also targeting market concentration, Allan Fels, <a href="http://esacentral.org.au/national-economic-panel-item/16044/james-morley/?type_fr=369" target="_blank">James Morley</a>, and <a href="http://esacentral.org.au/national-economic-panel-item/17340/john-quiggin/?type_fr=369" target="_blank">John Quiggin</a> called for the separation of bank functions (with marketing separate from advice) or the breakup of banks themselves as happened in the United States under the <a href="https://www.investopedia.com/terms/g/glass_steagall_act.asp" target="_blank">Glass-Steagall Act</a> of 1933 which separated investment banks from deposit-taking banks.</p>
<p><a href="http://esacentral.org.au/national-economic-panel-item/15811/gigi-foster/?type_fr=369" target="_blank">Gigi Foster</a> called for foreign countries to send competent regulators to sort out Australian’s banking system, suggesting that Australian regulators were compromised.</p>
<p>John Quiggin called for a stand-alone “no frills” public bank modelled on New Zealand’s <a href="https://www.kiwibank.co.nz/about-us/" target="_blank">Kiwibank</a>, something he hoped would rein in the expansion of the financial sector that began in the 1970s. But he added:</p>
<p>These proposals may be beyond the realm of political feasibility, which is why I have expressed only modest confidence in my view.</p>
<p>Quiggin and a substantial minority of those polled acknowledged that - uncomfortably for economists - many of the barriers to getting banks to behave better lay outside the realm of economics. Like well-meaning doctors, economists have been dispensing prescriptions that “should work”, while the patient continues to die.</p>
<p>But standard prescriptions have their place – among them removing commissions, imposing salary caps, imposing fee caps, revoking licences and setting minimum jail terms, all of which would change the balance of risks and rewards and help put money back into the pcokets of ordinary Australians.</p>
<p>Of course, even applying traditional economic prescriptions require political will.</p>
<p>Perhaps surprisingly for a group of “dismal scientists”, 20 of Australia’s leading economists believe that change is possible. It isn’t the economics that is dismal, it’s the dearth of political courage to do what’s needed.<img src="https://counter.theconversation.com/content/111748/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><span><a href="https://theconversation.com/profiles/gigi-foster-194" target="_blank">Gigi Foster</a>, Professor, School of Economics, <em><a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a></em> and <a href="https://theconversation.com/profiles/paul-frijters-3277" target="_blank">Paul Frijters</a>, Co-Director, Wellbeing Program, <em><a href="http://theconversation.com/institutions/london-school-of-economics-and-political-science-1219" target="_blank">London School of Economics and Political Science</a></em></span></p>
<p>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/its-unanimous-economists-poll-says-we-can-fix-the-banks-but-that-doesnt-mean-we-will-111748" target="_blank">original article</a>.</p>
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Economists’ poll says we can fix the banks, but that doesn’t mean we will

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<p>Even in the cool of the darkened cinema over the summer break, bankers could not escape their deserved opprobrium. The plot of the movie, <span class="il">Mary</span> <span class="il">Poppins</span> Returns was premised on the pending mortgagee repossession of the London family home of Annabel, John and Georgie at 17 Cherry Lane.</p>
<p>The new boss of the Fidelity Fiduciary Bank, played by Colin Firth, ruthlessly sought to fraudulently repossess the grand terrace.</p>
<p>The unflappable, magical, but blunt <span class="il">Mary</span> <span class="il">Poppins</span> and the three children saved the house from foreclosure, and their hapless father from humiliation, with the bank returning to the honourable banking practices of the past.</p>
<p>Perhaps the Australian banking royal commissioner, Kenneth Hayne got to take his grandchildren to the <span class="il">Poppins</span> sequel, although Hayne was officially spending the Christmas break finalising his much anticipated report. </p>
<p>His exposure of recent boom time fraud and exploitation of borrowers by the big banks had already seen him deliver far more than the government and the public bargained for during the scandal-ridden hearings. The hearings proved we can’t place much trust in our regulators, commission-empowered advisors, the banking ombudsmen, the costly legal system to deliver justice and indeed the government to do their job.</p>
<p>Hayne's final report will have far reaching consequences, without any spoonful of sugar to help the medicine go down. Although the banks could benefit from the grenade thrown into the mortgage broking industry.</p>
<p>Tom Ravlic, the author of ‘Vulture City: How Banks Got Rich on Swindle’ (Wilkinson Publishing) due for publication later this year, wrote in The Telegraph last month that unquestioning, uncritical blind trust can no longer be afforded to lending institutions.</p>
<p>But I'd suggest the borrowing public need to take responsibility too. No one should care more about your money than you. I'd argue consumers need to spruce up their knowledge of financial products and the legal consequences of decisions. We know that most Australians spend more time on their footy tips than financial affairs.</p>
<p>The bank's own demonstrable swing towards more responsible lending practices in 2018 was overdue, but went too far. Common sense lending would anticipate property purchases typically trigger a more spartan lifestyle by the buyer than them continuing their spending habits from before their property purchase. </p>
<p>But last year we saw these discretionary lifestyle costs - such as uber eating habits, Netflix and even any weekend betting slips - included in the calculations by over reactionary lenders in their ultra cautious loan application reviews that severely reduced loan capacity. </p>
<p>We have a buyer's market, except they can't all buy what they previously thought they could afford because the bank's reaction to the exposure of some reckless lending exposed by the royal commission.</p>
<p>A couple with one child and a dual income of $120,000 could borrow $800,000 during the boom. Fast forward and the same couple, now with only mild wages growth to a $129,000 combined salary along with a second child, can only borrow $680,000 because of much stricter bank lending.</p>
<p>Their capacity to buy has gone backwards, and so too did prices, not surprisingly. This adjustment to price and capacity hit the market hard last year, but 2019 is likely to see buyers and vendors alike, become more accepting of the new landscape.</p>
<p>And there's already talk among buyers' agents that securing a bank loan has become easier this year.</p>
<p><em>This first appeared in</em> The Daily Telegraph.</p>
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jchancellor-FAypfDUnLy

Mary Poppins and the banking royal commission

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<p>EXPERT OBSERVER </p>
<p>After today’s Banking Royal Commission’s final report it may seem as if it is impossible for banks to regain trust.</p>
<p>But it is possible, as I know from working with prominent British and European banks after the global financial crisis, taking part in <a href="https://www.researchgate.net/publication/330738218_Restoring_Trust_in_the_Financial_Services_Sector_A_report_published_by_the_Industry_and_Parliament_Trust_of_the_UK_Parliament_Notes_from_the_Policy_Event_Meeting_'Restoring_Trust_in_the_Financial_Serv" target="_blank">policy meetings</a> at the UK parliament about how to restore trust, and researching <a href="https://www.researchgate.net/publication/330737895_The_Recovery_of_Trust_Case_studies_of_organisational_failures_and_trust_repair" target="_blank">cases of trust repair</a>.</p>
<p>Here are the six most important questions our banks will need to answer for their stakeholders to regain trust:</p>
<h2>1. What went wrong and why?</h2>
<p>When a major breach of trust occurs, it is often unclear what caused it and who is responsible. It is essential to get a shared understanding of what happened.</p>
<p>This can be arrived at through inquiries and investigations which are most effective when timely, comprehensive, and independently conducted.</p>
<p>The royal commission is itself such an inquiry and will help, as did the <a href="https://www.parliament.uk/bankingstandards" target="_blank">Parliamentary Commission into Banking Standards</a> in the UK.</p>
<p>But banks also need to conduct their own investigations and explain what happened to their customers and shareholders.</p>
<p>The paradox is that such a “warts and all” investigation is likely to lower trust in the short term as the true extent and scale of the misconduct is revealed.</p>
<p>But without it, it is hard to “draw a line in the sand” and move on.</p>
<h2>2. Have the banks learned their lesson and made amends?</h2>
<p>Social rituals and symbolic acts - such as apologies, fines, punishments and compensation - play an important role in repairing trust.</p>
<p>They signal that the organisation understands its conduct was wrong and has “paid a price”. They can help resolve negative emotions and restore a sense of equity and justice in the relationship between the organisation and its stakeholders.</p>
<p>Apologies are usually more effective when combined with substantive actions - such as offering compensation - to avoid appearing as “cheap talk”. They are also more effective when offered voluntarily. Unfortunately, Australia’s banks have often been reactive, issuing public apologies only after damning evidence has emerged, and being slow to offer compensation.</p>
<h2>3. Can future violations be prevented?</h2>
<p>Given what’s been revealed at the royal commission, stakeholders want to see evidence that the banks have “got their house in order” and won’t let it happen again. This will require <a href="https://sloanreview.mit.edu/article/designing-trustworthy-organizations/">comprehensive reforms</a> to their strategies, cultures, incentive schemes, and formal control mechanisms (such as revised accountability and governance structures, procedures, rules, policies, and codes of conduct).</p>
<h2>4. Is trustworthiness embedded in their DNA?</h2>
<p>Banks are typically good at formal controls. The more difficult task is bringing about cultural change. Yet it is absolutely necessary, because cultural values and norms powerfully influence behaviour.</p>
<p>Ensuring that trust-inducing values and decision making are role modelled and embodied by leaders and managers and embedded in everyday routines will require the banks to challenge firmly held beliefs and assumptions that lead them to prioritise short-term profits and returns to shareholders over a more balanced multi-stakeholder perspective grounded in a broader purpose and responsibility to society.</p>
<h2>5. Do others believe the banks are trustworthy?</h2>
<p>Transparently sharing information about their conduct over time (through for example corporate reporting and monitoring) and having it verified by credible independent third parties (such as auditors) can help restore and maintain trust. It signals the bank has “nothing to hide”.</p>
<p>In the UK, the <a href="https://www.bankingstandardsboard.org.uk/" target="_blank">Banking Standards Board</a> was established to monitor and report on bank conduct and culture.</p>
<p>Its latest report found <a href="https://www.theguardian.com/business/2018/nov/13/overhaul-of-uk-poor-banking-culture-is-slow-admits-standards-chair" target="_blank">slow progress had been made on fixing the UK’s poor banking culture</a> five years on from the UK’s equivalent of our royal commission. That is testament to how hard it is to achieve real cultural change.</p>
<h2>6. Is the external governance now effective?</h2>
<p>Stakeholders need to know that reforms to the governance and regulation of the industry will reward trustworthy conduct, identify and punish misconduct, and root out systematic problems.</p>
<p>This is important for upholding minimal standards of conduct over time.</p>
<p>The banks will have to convincingly answer each of these questions in order to regain trust. Leaving any one of them unaddressed means it might not happen.</p>
<p>The banks will find the task neither quick nor easy.</p>
<p>It will require time, money, effort, political will, coordination amongst a range of actors and skilled change management, among other things.</p>
<p>Given banks are an essential pillar of a well-functioning society, it is important that they rise to the challenge.</p>
<p>Today’s report will provide an opportunity.</p>
<p></p>
<p><span><a href="https://theconversation.com/profiles/nicole-gillespie-389397" target="_blank">Nicole Gillespie</a>, Professor of Management; KPMG Chair in Organizational Trust, <em><a href="http://theconversation.com/institutions/the-university-of-queensland-805" target="_blank">The University of Queensland</a></em></span></p>
<p>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/six-questions-our-banks-need-to-answer-to-regain-trust-110715" target="_blank">original article</a>.</p>
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jrobinson-rf4aSBido9

Six questions our banks need to answer to regain our trust

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<p><span>EXPERT OBSERVER</span></p>
<p><span>The long-awaited report from the banking royal commission proves that even within regulated environments lawlessness can be rife. </span></p>
<p><span>The multitude of examples of potentially criminal activity within the financial services sector was a sign of what can happen when money becomes more important than client outcomes. </span></p>
<p><span>If this is what happens in a regulated </span><span>industry, imagine the situation in the property investment advice sector </span><span>where spruikers can ruin people’s financial lives without </span><span>much chance of prosecution becau</span><span>se it is an unregulated environment?</span><span><br></span></p>
<p><span>The report </span><span>suggests that many in the financial services sector were motivated by </span><span>greed rather than acting in their client’s best interests, however, such a blanket </span><span>statement does a disservice to the majority of honest employees working in the industry. </span></p>
<p><span>Mortgage brokers</span><span>, for example, create much-needed competition and deserve to be </span><span>paid for their professional service, so we’re pleased that the Federal Government </span><span>has questioned the recommendation that commissions be paid by consumers rather than banks </span><span>– </span><span>who are the ones who can clearly </span><span>afford it the most.</span></p>
<p><span>The 2018 PIPA Investor Sentiment Survey found that more than 75 per cent of investors secured their last investment loan through a mortgage broker, up slightly from the year before, and dramatically more than the 2015 number of 65 per cent. </span></p>
<p><span>About 86 per cent intend to finance their next investment loan through a broker, according to the survey. </span></p>
<p><span>I hope the report’s </span><span>release would bring an end to the over-the- top credit restrictions that had been in play for more than three years, which were starting to have a negative impact on the national economy. </span></p>
<p><span>Solid borrowers, who should have no problem securing finance under normal credit conditions, are getting knocked back for silly reasons such as spending $50 on Uber Eats on a Friday night.</span><span><br></span></p>
<p><span>With property prices continuing to fall in our two biggest capital cities, inflation </span>stubbornly low, and wages flat-lining, lenders need to release their strangle-hold on credit so our economy can get moving again.</p>
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<p><span>The health of the banking sector is vital for our economy, but so too is the property market, which is worth $7.5 trillion compared to superannuation on $2.7 trillion, according to CoreLogic. </span></p>
<p><span>It’s time for </span><span>the Federal Government to get serious about protecting consumers from unscrupulous spruikers </span><span>who pretend to give property investment ‘advice’, but all they’re really do is lining their own back pockets </span><span>without having to worry about breaking the law </span><span>– because there isn’t </span><span>one</span><span>.</span></p>
<p><span>According to the 2018 PIPA Investor Sentiment Survey, an overwhelming majority of respondents (95 per cent) believe that any provider of advice should have formal training, and almost all (90 per cent) believe that any provider of property investment advice should be regulated or licensed.</span></p>
<p>Peter Koulizos is the <a href="http://www.pipa.asn.au/about-us/our-board" target="_blank">chairman</a> of Property Investment Professionals of Australia (PIPA).</p>
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Banking royal commission report proves lawlessness is rife

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<p>EXPERT OBSERVER</p>
<p><span><em><a href="http://theconversation.com/institutions/rmit-university-1063"></a></em></span></p>
<p>Every 10 to 15 years it’s the same.</p>
<p>Ever since <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-02-04/banking-scandals-were-decades-in-the-making/10771612?section=business" target="_blank">financial deregulation in the 1980s</a> we’ve had a finance industry scandal followed by an inquiry, a quick fix, and a declaration that it shouldn’t happen again.</p>
<p>In the early 1990s there were royal commissions into the A$1.7 billion <a href="https://www.propertyobserver.com.au/https://trove.nla.gov.au/people/591917?c=people" target="_blank">Tri-continental/ State Bank Victoria</a> collapse, the A$3.1 billion State Bank of South Australia collapse and the <a href="http://www.parliament.wa.gov.au/intranet/libpages.nsf/webfiles/rc+1992/%24file/0015319.pdf" target="_blank">WA Inc</a> collapse which explored the interrelated activities at Rothwells bank, the A$1.8 billion collapse of Bond Corporation and the A$1.2 billion siphoned from Bell Resources.</p>
<p>A decade later in 2003 Justice Owen reported on the A$5.3 billion <a href="https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22library/prspub/XZ896%22" target="_blank">collapse of Australia’s largest insurer HIH</a>.</p>
<p>And now, bang on schedule, we have Kenneth Hayne delivering the <a href="https://financialservices.royalcommission.gov.au/Pages/default.aspx" target="_blank">final report</a> of a royal commission into systemic misconduct in banking, superannuation and financial services industry to a government that voted 26 times against holding it.</p>
<p>There are two particularly striking things about the 10-15 year cycle.</p>
<p>One is the rhythm of public inquiries followed by reports, then (sometimes) trials, then books, then almost everyone forgetting (except for those personally scarred) only for problems to resurface later.</p>
<p>The other is that the times between have been punctuated by government-commissioned banking and financial system reviews: the 1991 <a href="http://fsi.gov.au/files/2014/01/Chpt1-12.pdf" target="_blank">Campbell Inauiry</a>, the 1996 <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/RP9697/97rp16" target="_blank">Wallis Inquiry</a>, the 2010 <a href="https://treasury.gov.au/review/super-system-review/" target="_blank">Cooper superannuation review</a> and the 2012 <a href="http://fsi.gov.au/publications/" target="_blank">Murray Review </a>. Each either missed or downplayed the links between poor governance, industry structure, systemic misconduct and prudential risk.</p>
<h2>Has Kenneth got the frequency right this time?</h2>
<p>Commissioner Kenneth Hayne’s 1000-page final report hasn’t gone far enough to end this cycle.</p>
<p>While his referral of 24 misdeeds for possible criminal and civil prosecution will help in righting past wrongs and perhaps focus the minds of directors and executives, the impact will be generational rather than permanent.</p>
<p>The flurry of prosecutions and actions will again reveal <a href="https://www.theage.com.au/business/banking-and-finance/asic-life-ban-overturned-after-aat-find-key-arguments-not-raised-20181014-p509jc" target="_blank">problems with the law</a> - gaps in coverage, inadequate penalties and cases the law won’t allow to stand up.</p>
<p>Taken together the recommendations are a patchwork of measures that if implemented will over time be eaten away – and at some point will be dismantled – because the rationale for their adoption will be forgotten.</p>
<p>Even before they are implemented they will have to run the gauntlet of a massive subterranean lobbying effort from industry to water them down, something Hayne indicated he expected.</p>
<h2>The deepest flaw lies unaddressed…</h2>
<p>Even though Hayne emphasises the link between systemic misconduct, governance, structure and prudential (system-wide) risk, something that Treasury, the RBA and Australia’s three business regulator amigos, APRA, ASIC and the ACCC, <a href="https://theconversation.com/treasury-admits-corporate-governance-is-broken-but-baulks-at-systemic-fixes-100882" target="_blank">have long rejected</a>, he makes no concrete suggestions to tackle it.</p>
<p>As we have written previously, research tells us big systemically important shareholder-focused universal for-profit banks that cross-sell products are more profitable than smaller banks in the good times but are <a href="https://theconversation.com/treasury-admits-corporate-governance-is-broken-but-baulks-at-systemic-fixes-100882" target="_blank">more prone to misconduct and to failure in the worse times</a>.</p>
<p>Australia’s big four fit the bill - they’re big, they have been vertically integrated one-stop shops, they are very, very profitable and they are very focused on shareholder returns.</p>
<p>While the banks, apart from Westpac, have divested themselves of wealth management and insurance arms for now there is nothing stopping them reacquiring them in the future.</p>
<p>This means we are once again 10 or 15 years away from systemic misconduct resurfacing as big banks seek to become more profitable.</p>
<h2>…and putting the onus on directors won’t much help</h2>
<p>While heads might roll in yet another round of internal investigations to fix bank culture, it is wise to remember that as <a href="https://www.smh.com.au/business/banking-and-finance/asic-red-faced-over-opes-prime-verdict-20130906-2ta8f" target="_blank">Adele Ferguson observed</a> ANZ’s internal investigation of the Opes Prime collapse left the bigger governance lessons “unlearned”.</p>
<p>Directors and senior executives of failed companies continue to live charmed lives.</p>
<p>The directors of Babcock and Brown <a href="https://www.smartcompany.com.au/finance/economy/babcock-brown-leaders-disgraceful-exit-kohler/" target="_blank">were cheered as they left the building</a>, while friends and family of the disgraced One.Tel director Jodee Rich have resurfaced at Hayne and other public inquiries.</p>
<p>Some of the <a href="https://www.smh.com.au/business/james-packer-and-lachlan-murdoch-close-to-onetel-settlement-20140411-36iii" target="_blank">One.Tel directors</a> have had long corporate careers. The former chair at of the collapsed <a href="https://en.wikipedia.org/wiki/Allco_Finance_Group" target="_blank">Allco Finance Group</a> Bob Mansfield went on to review the ABC.</p>
<p>As Adam Schwab bluntly put it, <a href="https://www.crikey.com.au/2014/03/24/after-babcock-browns-collapse-its-money-men-try-again/" target="_blank">“corporate Australia is nothing if not forgiving”</a>.</p>
<h2>It’ll chase horses rather than close doors</h2>
<p>Hayne is persisting with a chasing bolting horses approach to misconduct that relies on detection and enforcement.</p>
<p>We have argued this approach is <a href="https://theconversation.com/solving-deep-problems-with-corporate-governance-requires-more-than-rearranging-deck-chairs-99297" target="_blank">just not as a effective as other alternatives such as two-tier boards and employee directors</a> which have a better track record of keeping stable doors closed and horses tethered.</p>
<p>Without them we could very easily have another crisis and another royal commission in 15 to 15 years time.</p>
<p>Ireland has taken a been prepared to change corporate structures. After the meltdown of its financial system triggered by the end of a “classic vanilla property boom” its parliament legislated to appoint <a href="https://doi.org/10.1080/14735970.2015.1128752" target="_blank">public interest directors to the boards of its </a><a href="https://doi.org/10.1080/14735970.2015.1128752" target="_blank">failed</a><a href="https://doi.org/10.1080/14735970.2015.1128752" target="_blank"> banks</a>.</p>
<p>These changes were designed to ensure banks directors put the public interest first, ahead of shareholders interests and even customers interests.</p>
<p>It’s beyond time we did it here.<img src="https://counter.theconversation.com/content/110437/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><span><a href="https://theconversation.com/profiles/andrew-linden-330227" target="_blank">Andrew Linden</a>, Sessional Lecturer, PhD (Management) Candidate, School of Management, <em><a href="http://theconversation.com/institutions/rmit-university-1063" target="_blank">RMIT University</a></em> and <a href="https://theconversation.com/profiles/warren-staples-426467" target="_blank">Warren Staples</a>, Senior Lecturer in Management, <em><a href="http://theconversation.com/institutions/rmit-university-1063" target="_blank">RMIT University</a></em></span></p>
<p>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/haynes-failure-to-tackle-bank-structure-means-that-in-a-decade-or-so-another-treasurer-will-have-to-call-another-royal-commission-110437" target="_blank">original article</a>.</p>
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Hayne’s failure to tackle bank structure means that in a decade we will have to call another banking royal commission

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<p>GUEST OBSERVATION</p>
<p>The financial services royal commission resumes for its final round of hearings on Monday, and reappearing before Justice Hayne will be the chief executives each of the big six institutions he has in his sights: the Commonwealth Bank, Westpac, AMP, Macquarie, ANZ, and the National Australia Bank.</p>
<p>At issue are shocking abuses of trust, and when the government responds after receiving the report in February it will be under pressure to introduce tighter rules that more closely regulate bankers’ behaviour.</p>
<p>There’s another, better, path it could follow. It could loosen the rules and treat bankers more like doctors.</p>
<p><strong>Crude attempts to regulate behaviour fail</strong></p>
<p>We trust doctors, not because their behaviour is tightly regulated but because it is self-regulated. As professionals they strive to be trustworthy, in the same way as citizens who don’t cheat on their social security claims, or restaurant customers who don’t eat without paying.</p>
<p>A regulation imposed on top of a relationship of trust can ruin it.</p>
<p>In a famous study titled A Fine Is A Price, economists Uri Gneezy and Aldo Rustichini examined what happened when an Israeli daycare centre attempted to impose fines on parents who picked up their children late.</p>
<p>Surprisingly, the trial of the fine resulted in more, rather than fewer, late pickups.</p>
<p>In the eyes of the late parents, the fine changed late pickups from bad behaviour into an acceptable outcome of cost-benefit analysis. They simply interpreted the fine as a babysitting cost, and weighed it against the benefit of arriving when it suited them. Moral motivations were crowded out.</p>
<p><strong>Doctors take vows</strong></p>
<p>Professionals with ethics take vows to honour their duty to their clients, even where the costs of doing so are greater than the benefits of not doing so.</p>
<p>Service providers who don’t take ethics seriously weigh the costs and benefits of acting in the interests of their clients versus acting in their own interests. This ‘moral optimization’ may take account of ethics, but only if it pays.</p>
<p>Many financial services workers don’t take ethics seriously partly because they have been trained in economics or finance – disciplines which teach that cost-benefit analysis applies to everything.</p>
<p>A start would be to train them better. Their teachers could listen to the words of the creator of much of the theory used to justify performance pay, Michael Jensen of Harvard:</p>
<p>"We teach our students the importance of conducting a cost-benefit analysis in everything they do. In most cases, this is useful – but not when it comes to behaving with integrity."</p>
<p>When integrity is at stake it is better to replace moral optimization with moral prioritization, by giving priority to moral principles like telling the truth or looking after vulnerable clients.</p>
<p><strong>Money changes things</strong></p>
<p>Recent research on the psychological power of money suggests that financial market participants are at risk of negative ethical tendencies when money is used as an incentive, or even when they are just reminded of its importance, so-called money priming.</p>
<p>Money is used as an incentive to in order overcome the so-called principal-agent problem in which agents, (workers or chief executives) are tempted to put they own interests ahead of those of the firm they work for.</p>
<p>It can work, but if high-powered financial incentives communicate that the recipient’s only goal should be to maximise profit, then a culture of material self-interest takes hold, constrained at best by the letter of the law. And this crowds out other interests, such as those of their customers.</p>
<p>This means high-powered financial incentives can solve one kind of untrustworthiness, but only by creating another.</p>
<p>Professionals such as doctors and teachers solve the principal agent problem in another way: through ethics.</p>
<p><strong>Banking could be a profession</strong></p>
<p>Rather than further regulation, we propose a greater focus on ethics through a program of professionalisation, including:</p>
<ol>
<li>
<p>Establishing an interim professional body run by outsiders who come with a proven ethic of serving the public in fields such as education or health. After five years the finance industry can apply to the government to staff and run the body itself, subject to performance.</p>
</li>
<li>
<p>A winding back of regulation in order to signal that “you are professionals who have to take responsibility for ethical judgements”. The professional body could stand down senior managers deemed not to be showing commitment to the new culture.</p>
</li>
<li>
<p>A fundamental change of bonuses so that they become incentives for ethical behaviour. We suggest an automatic bonus payment of 10-20% of total pay. It could be withheld for two reasons: either poor financial performance of the firm, or an ethical breach. In effect, it would be a negative bonus. Multiple ethical breaches would result in the loss of professional status and employment.</p>
</li>
</ol>
<p><strong>Regulation hasn’t worked</strong></p>
<p>Automatic bonuses remove the extreme money priming of the finance industry, and they can be helpful in maintaining employment in the event of a downturn. They can simply be reduced instead of laying off staff, as happened during the global financial crisis.</p>
<p>Boosting regulation and boosting the capability of regulators, as many say they want, could work against developing the ethics and the trust that makes other professions work.<img src="https://counter.theconversation.com/content/106927/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><em><strong>Warren Hogan</strong>, Industry Professor, University of Technology Sydney and Gordon Menzies, Associate Professor of Economics, University of Technology Sydney</em></p>
<p><em>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/a-tip-for-bankers-ahead-of-the-royal-commission-be-more-like-doctors-106927" target="_blank">original article</a>.</em></p>
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