Former prime minister John Howard weighed in last week, warning government members that any inquiry would be "rank socialism".
It was an odd choice of words. Our banks and financiers have been happy recipients of state sponsored socialism for the past decade.
Prior to the financial crisis, there was an understanding the Reserve Bank would stand behind any bank in trouble as a lender of last resort.
As the crisis took hold, however, almost every Australian commercial bank was in danger of collapse because they could no longer refinance their debts.
The Rudd government stepped in, guaranteeing all new borrowing by allowing the banks to use the Commonwealth's AAA credit rating.
As a result, taxpayers delivered a $120 billion bailout to our banking system as the banks refinanced their international loans.
It was the greatest industry subsidy in our history. And it continues.
That once implicit guarantee for individual organisations became an explicit guarantee for the entire industry, forever changing the relationship.
It's a guarantee the Reserve Bank has calculated to be worth about $5 billion a year to our big four banks.
It didn't stop there. Short selling of financial stocks was banned temporarily, following furious lobbying, particularly by Macquarie Bank.
As an added bonus, the Rudd government guaranteed deposits up to $1 million in an effort to stop any run on the banks.
Those guarantees have remained in place ever since although the deposit guarantee has been wound back to $250,000.
They are an insurance policy — delivered free of charge courtesy of the taxpayer — that the banks have happily accepted ever since. Not that there has been any gratitude.
When Treasurer Scott Morrison announced a bank levy on bank transactions in the May Budget, the outcry from the banking sector was deafening.
Once upon a time, this type of behaviour was laughingly referred to as agrarian socialism — maximise your profits and socialise your losses — because it largely was confined to the rural sector.
It was an odd choice of words. Our banks and financiers have been happy recipients of state sponsored socialism for the past decade.
Prior to the financial crisis, there was an understanding the Reserve Bank would stand behind any bank in trouble as a lender of last resort.
As the crisis took hold, however, almost every Australian commercial bank was in danger of collapse because they could no longer refinance their debts.
The Rudd government stepped in, guaranteeing all new borrowing by allowing the banks to use the Commonwealth's AAA credit rating.
As a result, taxpayers delivered a $120 billion bailout to our banking system as the banks refinanced their international loans.
It was the greatest industry subsidy in our history. And it continues.
That once implicit guarantee for individual organisations became an explicit guarantee for the entire industry, forever changing the relationship.
It's a guarantee the Reserve Bank has calculated to be worth about $5 billion a year to our big four banks.
It didn't stop there. Short selling of financial stocks was banned temporarily, following furious lobbying, particularly by Macquarie Bank.
As an added bonus, the Rudd government guaranteed deposits up to $1 million in an effort to stop any run on the banks.
Those guarantees have remained in place ever since although the deposit guarantee has been wound back to $250,000.
They are an insurance policy — delivered free of charge courtesy of the taxpayer — that the banks have happily accepted ever since. Not that there has been any gratitude.
When Treasurer Scott Morrison announced a bank levy on bank transactions in the May Budget, the outcry from the banking sector was deafening.
Once upon a time, this type of behaviour was laughingly referred to as agrarian socialism — maximise your profits and socialise your losses — because it largely was confined to the rural sector.
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