Professor Philip Lane:

I think there are different perspectives on this. We can have a discussion describing what happened and say "Here's the different types of violations of what should have happened, happened." We can talk about the fact that our regulatory framework was clear. It was stated on page 1 of our consumer protection code that the best interests of consumers needed to be put first. One can ask where errors occurred - actual errors. For example, one could ask how could their be coders who could not the correct interest rates into IT systems? The lenders might have had lawyers telling them that a certain contract was okay and that they could proceed. However, why did they not have ethical frameworks, cultural frameworks, stating that, technically, they might have got away with these actions in a court, but that it was not in the best interests of consumers and so they should have been making more generous decisions in favour of the consumers? Why was that culture lacking in these organisations? As the Senator says, short-term profitability was prioritised.

There is a long list here. I think the culture reports will help. These banks should also be doing reports on their own histories of this. I think they can do that. There are many lessons to be learned for everyone here. As I said, and I think we have all said this, the priority for us has been to get the redress and compensation. However, there are aftermath issues to sort out regarding the culture that I mentioned and the narrative of how it happened. Simultaneously, it must also be recognised that much of what we did at that time has now proven helpful in enabling us to go beyond just the contracts and to tell the lenders that they violated our code, that they were not transparent and that we told them not to do this. The fact they were given these warnings in 2008 and so on is now helping us to enforce redress and compensation. What we are trying to say in this report is that this should never have happened. However, we must try to make clear that the Central Bank has acted throughout on behalf of the customers. We take our consumer protection mandate very seriously, and throughout we have been working to try to fix this. That is an important part of the way in which regulation works: when problems emerge, they are fixed. The guidance is given through the codes and regulations. We will try to do more and more about pre-empting problems before they emerge, but when a problem does emerge we try to fix it. That is what has been happening.