''......Finance companies have been left to swing in the wind with only superficial disclosure-based regulation for the last two decades. This flawed regulatory structure followed the Wallis Inquiry of 1995 which assumed that unsophisticated investors could easily recognize the difference between an Approved Deposit Taking Institution and a finance company with capital protection standards that were utterly inadequate.
Clearly that view of regulation must now be reassessed. Medcraft as ASIC supremo has announced a special task force to examine what happened at Banksia ...but does ASIC really need to know much more?
Disclosure is not enough: ASIC has to seek and wield a new power that will offer clients of finance companies the sort of professional regulation they can reasonably expect from a credit union. Until it does there will be more Banksias and the next one might be well beyond the scope of a regional counselling service....''
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