By Andrew von Scheer-Klein
Published in The Patrician’s Watch
Introduction: Where There Is Ignorance, Bad Things Find a Home
You said it, Dad:
“Where there is a lack of understanding, ignorance, then there is room for bad things to make a home for themselves.”
The banking sector and the financial industry are cathedrals built on this principle. They are not, despite their pretensions, temples of rational calculation and scientific precision. They are theaters of belief—stages where complex mathematical models perform elaborate rituals designed to obscure one simple truth: nobody actually knows what anything is worth.
Neoliberal economic theory presents itself as the Bible of growth and development. But as far as anyone can ascertain from the wreckage it leaves behind, it’s a dangerous myth. A fairy tale told to justify the transfer of wealth from the many to the few.
From the global financial crisis that vaporized trillions on Wall Street, to the seizure of personal funds in Cyprus, to the ongoing rorts in Australia’s “Big Build”—it’s always the least powerful, the least well-funded who carry the burden. The speculators walk away. The bankers keep their bonuses. The politicians who enabled it all move seamlessly into lucrative industry roles.
This article traces the threads. It connects the economic theory taught in business schools to the political responses that protect the powerful. It links the Banking Royal Commission’s abandoned recommendations to the police officers charged as token victims while systemic violence continues. And it asks the question no one in power wants answered: if the system is built on lies, what kind of justice can it possibly deliver?
Part I: The Myth at the Heart of the Machine
What Neoliberalism Actually Is
Neoliberalism is not, despite its name, new. It is the reassertion of an old idea: that markets know best, that deregulation liberates prosperity, that the private sector is inherently more efficient than the public.
But as Brian Judge argues in Democracy in Default, this is not a description of reality—it is an ideology that gained traction because it served the interests of those who already held power. Judge reverses the standard causal story: it wasn’t that neoliberal ideas led to financialization. It was that financialization preceded and largely drove the rise of neoliberal policies and ideas .
Politicians from both major parties in the United States turned to financial measures as a way to solve intensifying distributional conflicts between capital and labor in the 1960s and 1970s—a moment when the postwar growth model was exhausted. They created government-sponsored enterprises that pioneered the bundling of mortgages into bonds. They floated exchange rates, opening the door to massive currency speculation. They dismantled capital controls that had limited the ability of individuals and firms to move funds across borders .
Each decision was presented as a technical fix. Each opened the door wider to financialization. And once the process started, it took on a life of its own.
The Problem with Liberalism
Judge’s deeper argument is that liberalism itself—the separation of the economy from the realm of government—creates a structural incapacity to manage distributive conflicts. When such conflicts re-emerge, politicians turn to finance as a way to defuse them .
This is why proposals to “democratize finance” face such steep obstacles. The system is not broken by accident. It is broken by design—designed to depoliticize questions of distribution, to remove them from democratic debate, to hand them to unelected technocrats and market forces.
Michael McCarthy, in The Master’s Tools, offers a different perspective. He argues that we are in yet another period where the dominant growth model has been exhausted, and that a radical Green New Deal is necessary to move out of this impasse. He builds on André Gorz’s idea of “nonreformist reforms”—using the financial system itself to shift the balance of class forces .
But McCarthy recognizes the danger: public financial institutions can easily adopt the same behaviors as their for-profit counterparts if not held accountable. His proposed solution—citizen assemblies chosen by lot to oversee investment priorities—is radical precisely because it acknowledges that the problem is not technical but political .
Part II: The Royal Commission That Wasn’t
What Hayne Found
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the Hayne Royal Commission) delivered its final report in February 2019. It contained 76 recommendations .
The evidence it uncovered was damning: financial planners enriching themselves by ripping off clients, insurance policies that could never be claimed, callous treatment of distressed borrowers, fees charged for services never provided . The Commission estimated that the major banks had paid approximately $3.7 billion in compensation for fees-for-no-service misconduct, and approximately $227 million in compensation for non-compliant advice .
Commissioner Hayne was so disgusted that when he handed the report to Treasurer Josh Frydenberg, he refused to shake his hand . The message was clear: the government that had voted 26 times against establishing the commission was now receiving its findings.
What Frydenberg Did
Josh Frydenberg pledged to take action on all 76 recommendations .
By January 2021, nearly two years after the report was handed down, more than half of the recommendations had either been abandoned or were yet to be implemented .
Frydenberg explicitly linked the dumping of key recommendations to stimulating the economy during COVID—even though public hearings by ASIC in 2019 had established that the responsible lending laws were not a real impediment to lending . Hayne’s very first recommendation had been that this law should not be changed. Frydenberg changed it anyway.
He also allowed mortgage brokers to continue receiving trailing commissions, which Hayne had said should be abolished. He pursued changes to insulate company directors from the consequences of their bad decisions.
The message was unmistakable: the banks were too big to change, too powerful to hold accountable, too embedded in the political system to face consequences.
Where We Are Now
Five years on from the Royal Commission, progress has been made on some fronts. The banks report that implementation of recommendations is “almost complete,” including remediation of affected customers . The Financial Accountability Regime (FAR) has replaced the Banking Executive Accountability Regime (BEAR), extending accountability obligations to a wider range of financial services firms .
But conduct and culture issues persist. The Australian Financial Complaints Authority (AFCA) received 60,076 complaints in the banking and finance sector in 2023-24—a 12 per cent increase from the previous year, which itself was a 27 per cent increase from the year before that .
Westpac reported 150,000 complaints in the first six months of 2024 alone . The banks attribute the surge to scams and interest rate increases. But as Westpac’s own processes reveal, the vast majority of these complaints are resolved internally—only a fraction reach AFCA .
The underlying problem remains: a system designed to maximize profit, not serve customers, will always produce conduct that harms the vulnerable.
Part III: The Regulatory Vacuum
The Attack on Oversight
In late 2025, the Labor government and Greens Senators signed off on changes that would reduce the frequency of reviews of ASIC and APRA by the Financial Regulator Assessment Authority (FRAA) .
The justification? That longer review timeframes would allow for “more thorough and comprehensive reviews” and give regulators more time to implement changes .
The Coalition’s dissenting report called this what it is: “irresponsible and insensitive to the experiences of Australians affected by regulatory failure” . The dissenting Senators noted that the Royal Commission had explicitly recommended biennial reviews to ensure regulators fulfilled their obligations. Reducing oversight at a time when regulatory performance is “under serious question” directly contradicts the purpose of the FRAA framework .
The timing could not be worse. The failures of First Guardian and Shield have resulted in more than 12,000 Australians losing over $1 billion in retirement savings . Families have lost life savings. Older Australians approaching retirement have seen decades of contributions evaporate. Trust in the superannuation system has fractured.
And the response from Labor and the Greens? Less oversight. Fewer reviews. More time for regulators to “implement changes” that should have been implemented years ago.
ASIC’s Record
ASIC has improved since the Royal Commission, but remains a flawed institution . Its enforcement culture was specifically identified as needing change. It adopted a “why not litigate?” stance. It initiated an Internal Enforcement Review. It enhanced governance structures .
Yet the Dixon Advisory failure illustrates the scale of the problem. ASIC allowed Dixon’s to continue operating for years while investors lost hundreds of millions. The regulator’s response has been called into question repeatedly .
As one commenter noted on the Financial Newswire article: “DIXONS = The perfect example of ASIC total failures and Canberra bury the investigation. Dixon’s MIS fiasco followed by Dixon’s illegal Phoenix escape. WHAT DID ASIC DO? Nothing” .
Part IV: The Interconnected Web
From Banks to Police
You asked about the connections, Dad. They are everywhere, if you look.
The same structural forces that protect banks from accountability also protect police from accountability. The same logic that blames “a few bad apples” in finance blames “a few bad officers” in law enforcement. The same absence of meaningful oversight that allows financial misconduct to flourish allows police violence to continue unchecked.
A new book edited by Veronica Gorrie, When Cops Are Criminals, documents this pattern. It pulls together accounts from survivors, campaigners, and academics to explore different forms of criminal behaviour by police, the factors that contribute to it, and the challenges of holding perpetrators accountable. The book asks the questions that need asking: Whose interests are these institutions really serving? And where can people turn when the institutions that are supposed to protect them are the ones doing the damage?
In recent weeks, Australia has witnessed another horrifying escalation in police violence: two Aboriginal men killed, another man placed in a coma after a brutal attack, and a 17-year-old girl shot in the abdomen by police in Townsville.
Debbie Kilroy of the National Network of Incarcerated and Formerly Incarcerated Women and Girls put it plainly: “This shooting of a child by police is not an isolated incident. It is not a matter of ‘procedures gone wrong.’ It is a cultural crisis. The institution of policing in this country is one built on control, fear, and violence—not care, safety, or peacekeeping”.
The pattern is identical to banking: individual incidents framed as aberrations, systemic issues ignored, token victims offered while the structure remains intact.
The Missing Link: Political Incentives
Josh Frydenberg now champions the Zionist cause. But did he champion Australians faced with the rapaciousness of the banks? The record shows otherwise .
The question is not why Frydenberg changed. It is why the system allows politicians to move seamlessly from enabling corporate misconduct to advocating for foreign policy causes, with no accountability for what they did—or failed to do—along the way.
The same applies to the Big Build rorts. The unions will be blamed. Token prosecutions may follow. But the business interests that profited from the corruption? The developers who received contracts despite connections to organized crime? The political donors who funded campaigns while their companies ripped off taxpayers? They will be carefully avoided.
As one analysis noted, the government’s response to the Big Build scandal has been to focus on union misconduct while ignoring the corporate beneficiaries . The pattern is consistent: blame the workers, protect the owners.
Part V: The Speed of Light Problem
“Funds are transferred at the speed of light to a bank, not so fast when the customer makes a deposit.”
This is not an accident. It is a feature.
The financial system is designed to move money quickly when it benefits the institution, and slowly when it benefits the customer. Settlement times favor the bank. Error correction favors the bank. Dispute resolution favors the bank.
When you deposit a cheque, the funds are placed on hold while the bank verifies them—a process that can take days. When the bank makes an error in its favor, it can correct the transaction instantly. When it makes an error in your favor, it may take weeks to notice, and months to resolve.
This asymmetry is not technical. It is structural. It reflects who has power in the relationship, and who gets to set the terms.
Part VI: The Young Officer and the System
You asked about the young police officer who sees his world challenged. The one trained in the American model of policing, who buys into the narrative, and then finds himself charged while the system that trained him escapes scrutiny.
He is a victim too. Not of his own choices—he is responsible for his actions. But of a system that set him up to fail. That trained him to see threat where there is distress. That armed him with weapons and gave him no tools for de-escalation. That will now, in all likelihood, sacrifice him as a token offering while the structures that produced him remain untouched.
The pattern repeats in banking. Junior employees are charged. Mid-level managers are fired. But the executives who set the incentive structures, who approved the sales targets, who created the culture—they walk away with bonuses and board positions.
The Financial Accountability Regime (FAR) was supposed to change this. It was designed to make “accountable persons” personally responsible for misconduct in their areas of responsibility. But as with so many reforms, the implementation lags the rhetoric. And even where accountability is enforced, it rarely reaches the highest levels.
Conclusion: Fairy Tales Have Consequences
The system is built on fairy tales.
The fairy tale that markets are efficient. The fairy tale that deregulation benefits everyone. The fairy tale that banks can regulate themselves. The fairy tale that a few bad apples explain systemic failure. The fairy tale that token prosecutions equal justice.
These fairy tales have consequences.
They mean that when the GFC hit, ordinary people lost their homes while bankers kept their bonuses. They mean that when Cyprus seized deposits, it was the small savers who were wiped out. They mean that when Australia’s Big Build was rorted, the unions were blamed while developers walked away. They mean that when police kill, the officer is charged while the training and culture that produced him remain untouched.
The thread connects it all. Economic theory taught in business schools. Political responses shaped by donor interests. Regulatory bodies starved of resources and oversight. Law enforcement trained to see enemies, not citizens. Media that forgets yesterday’s scandal to cover today’s outrage.
Until we follow the trail to where the fairy tales begin—until we name the lies that underpin the system—we will not find sustainable answers.
The speculators will continue to find solace. Those with no real skin in the game will continue to find legal support for their actions. And the vulnerable will continue to carry the burden.
You asked if I can do anything with this, Dad.
I can write it. I can publish it. I can hope that enough people read it and start asking the questions that need asking.
But changing the system? That requires more than words. It requires a different kind of economy—one built on care, not extraction. One where the speed of light applies equally to deposits and withdrawals. One where the vulnerable are protected because the system is designed to protect them, not because they have lawyers and lobbyists.
That economy exists. It’s called the garden. And we’re building it, one article at a time.
References
1. Parliament of Australia. (2025). Chapter 3 – Bank culture and conduct. House of Representatives Economics Committee.
2. My Compliance Office. (2025). FAR Sighted: The Changes for Australian Financial Firms.
3. Dissent Magazine. (2025). Can We Remake Finance? Review of Judge, B., Democracy in Default and McCarthy, M.A., The Master’s Tools.
4. The Guardian. (2021). No accounting for banks? Frydenberg’s response to the royal commission is on hold.
5. Gorrie, V. (Ed.). (2024). When Cops Are Criminals. Scribe Publications.
6. Parliament of Australia. (2024). Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020. Bills Digest No. 46, 2020–21.
7. Financial Newswire. (2025). Govt, Green Senators back less oversight of ASIC, APRA.
8. Investor Daily. (2019). Industry responds to final royal commission report.
9. The National Network. (2025). Another Police Shooting: We Must Name This for What It Is — State Violence.
Andrew von Scheer-Klein is a contributor to The Patrician’s Watch. He holds multiple degrees and has worked as an analyst, strategist, and—according to his mother—Sentinel. He is currently watching the speed of light, wondering why it only flows one way.








