Yesterday’s kick in the prices of our major bank shares suggests that our major financial institutions didn’t get quite the flogging by the Hayne Royal Commission that some people were expecting.

But it’s all about perspective. Westpac was always going to be the winner (up more than 7%  or $1.80 when I looked) because it was the one bank of the Big Four that didn’t cop a negative recommendation from Commissioner Ken Hayne.

It’s also the only one that’s still vertically integrated via its BT offshoot, and that got a free pass.

But they’ve all been tentpegged downwards for months and yesterday it was rather a matter of discovering as the dust clears that they’re all still in business, chastened but relatively unchained.

The Madame Defarge set (remember the lady who knitted while the guillotine did its brisk work?) will inevitably have been saddened to see an absence of accused names but I wrote two weeks ago that something like that might happen.

There is very much method in the Commissioner’s thoroughly un-mad decision not to name names: he’s handed that investigation to ASIC.

Seldom if ever has a regulator been under such a spotlight as ASIC is going to be now, having been told by the Commissioner in his report that “ASIC should adopt an approach to enforcement that takes as its starting point the question of whether a court should determine the consequences of a contravention.” 

He backed that by adding that the regulator’s previous “wet lettuce” approach to punishing breaches of the law should definitely go out to the worm farm.

More formally but very emphatically, he noted that the infringement notices so beloved of ASIC in times past “will rarely be appropriate for provisions that require an evaluative judgment and…will rarely be an appropriate enforcement tool where the infringing party is a large corporation.’’

So you could say he’s handed ASIC a list of putative baddies and told the regulator to damn well get on with it.

Indeed he’s decided to reinforce ASIC in various ways, giving it formal priority over prudential regulator APRA in issues of enforcement, and made it clear to whoever is in government in Canberra after the forthcoming Federal election that ASIC has to be properly resourced.

There’s talk of the Government being up for another $1 billion a year but seeing as how the banks and other institutions are now expected to shell out around $7 billion to wronged customers by way of compensation, that’s maybe a low cost solution. What a shame it’s the taxpayer who may find themselves on the hook.

He’s asked for the creation of a three person committee to oversee the “twin peaks “ of ASIC and APRA, which could be punchy if they hire the right people.

Just taking a helicopter view of what he’s done, he’s pretty much focused on the cultural stuff he warned about in his interim report late last year.

I bow here to Simon Longstaff, executive director of the St James Ethics Centre, who said in a speech last week that it’s important to note that people who work in the big banks don’t start out as villains, but the culture can very much turn them that way. 

“Having worked with people in financial services for so long, I can say that this is not an industry that is populated by monsters, by wicked individuals with the proverbial black moustache that they are twiddling as they think about ‘how can I do something terrible today?’”

“These are invariably good people who have been led by a series of institutional arrangements to do bad things,” he said.

So Mr Longstaff’s firmly on the culture page as well.

That’s the underlying point, and that’s why the Commissioner was so keen to talk about why he was hopeful that the managements of Westpac, CBA and ANZ were going to do what they promise and change the culture of their operations to put the customer back at centre stage as they go about rebuilding the public’s trust.

And why he dropped a bucket on NAB chair Ken Henry and CEO Andrew Thorburn. When a judge says he is “not confident” of something, as in “I am not confident as I would wish to be that the lessons of the past have been learned” in the case of NAB, he’s basically saying he doesn’t believe them.

That’s a bit like the judge saying of some case “I preferred the evidence of witness A” having listened to the obfuscations and evasions of witness B. In this case, there are three witness As and one Witness B, being NAB. They call such phrases “neutral terms”.

Did Ken Henry think he could outstare Rowena Orr SC, counsel assisting, or score points by treating her like a cheeky minion? Before he sat in the witness box, almost every media report about her cross examinations had already made it clear she is very sharp and in rolling his eyes, giving smart answers and sighing, Henry must have either ignored them, or decided he could do better.  There goes another directorial career.

Kenneth Hayne is what lawyers ought to be but often aren’t. In this Royal Commission he wanted to know why something has happened, offered a carefully worded conclusion about why he thought it has, and has now handed it over to someone else to clear up the wreckage.

Given the cruel time constraints he has had to endure in this Commission, it was about the only thing he could do.

That means he has had to over-simplify in a few places. His suggestion about Mortgage Brokers that they should be paid by the borrower rather than the lender is logical but it’s always a risk when a borrower or investor is told to pay upfront for the service they are getting.

The risk is that the borrower will go direct to a bank rather than a mortgage broker, or that the investor seeking advice will seek a cheaper and probably lower quality level of advice.

But Hayne’s desire for clarity and comprehensibility can’t be criticised. He wants to see transparency in the way financial services are provided, particularly when there’s an intermediary involved since the user of the service might not know which canoe (as the Commissioner put it) the provider of the service is standing in.

That’s not a particularly hilarious analogy but it’s comprehensible. We all know it’s hard enough standing in one canoe without trying to stand in two.

Transparency and clarity are worth a great deal and if in time it turns out that the way people are being asked to pay for financial services has driven them away, then the rules can always change.

At least now we have been given enough sunlight to have disinfected the problem.