Investment of the big four banks

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In order to address the problems that have been harming their clients in relation to the services they offer, the big four banks are investing significantly. The reputation of the banking industry has been suffering as a result of these service problems, and in 2016 it suffered a hit, forcing major companies to plan for reforms. Customers have long been dissatisfied with the services offered by banks, even if other service industries have been more successful at meeting customer needs. The banks will make sure that these modifications demonstrate how they benefit everyone of Australia by putting them into place. (100 words)

Financial Accounting

Christensen, Nikolaev, and Wittenberg-Moerman (2016) write that accounting theory involves the study and application of financial reporting principles utilizing a set of assumptions and procedures. Of interest is the Public Interest Theory; that conveys that the public demands for the amendment of ineffective and biased market practices are the drivers for regulation (Harnay & Scialom, 2016). In the case of the banks in the article, it is public interest that works towards obliging the banks to invest in improving the services that customers have constantly raised complaints about. The assumption is that the public interest makes the government regulate the operations of banks so that it can benefit the society (Kroszner & Strahan, 2014). However, the theory faults to identify the vested interests of the regulators who may not work towards representing the interests of the society. (137 words)


As disclosed by Harnay and Scialom (2016) the application of Public Interest Theory is geared towards the assumption that it holds to force the government to regulate the markets so as to have favorable conditions for the benefit of the society. The banks in this instance face the challenges in their operations due to the complaints by customers on some of the services being offered by the banks. The option taken by the banks to invest billions towards improving some of the services is a step towards satisfying their clientele who have raised concerns severally. It can be argued that some this move may be a step that was taken up by the government to regulate the banking sector's service delivery for the people using the banks. The notion in the public interest theory is that the government is a neutral body that has the power to protect its citizens from the inconsistencies of the markets (Baldwin, Cave & Lodge, 2012). If correct, then it is possible that the Public interest played a role in forcing the banks to invest a lot of money towards improving crucial services that have often been problematic for them.

However, the banks may have used the Public Interest theory to favor them and their operations. Despite several complaints by the clients, the bank only opts to implement a few of the problems they themselves deem dire. Carpenter and Moss (2013) point out that regulation employed in favor of public interest is actually controlled to an extent that private interest parties benefit more than the society. Banks, in this case, are making the improvements so as to improve their customer services; at the same time hoping that this move will fend off the government from conducting a royal commission into their activities. Clearly, the banks are using the public interest to cover up something that may be unlawful and they do not want to be exposed. The purpose of Public Interest Theory is to promote regulation that works towards supporting the general welfare of the society rather than the interests of well-organized stakeholders (Kochan, 2014). According to Mr. Freedman of AMR Australia-Reputation Institute Index, not only should banks provide excellent customer services but also should be able to benefit Australia as a whole. (378 words)


The purpose of regulation is to promote the general welfare of the society and the government should be the appropriate body to ensure that the society benefits rather than a few decision makers. The government should utilize regulation for the purposes of protecting its citizens from market failure and the consequent effects. (52 words)

Word Count: (680 words)



Baldwin, R., Cave, M., & Lodge, M. (2012). Understanding regulation: theory, strategy, and practice. Oxford University Press on Demand.

Carpenter, D., & Moss, D. A. (Eds.). (2013). Preventing regulatory capture: Special interest influence and how to limit it. Cambridge University Press.

Christensen, H. B., Nikolaev, V. V., & Wittenberg‐Moerman, R. (2016). Accounting information in financial contracting: The incomplete contract theory perspective. Journal of Accounting Research, 54(2), 397-435.

Harnay, S., & Scialom, L. (2016). The influence of the economic approaches to regulation on banking regulations: a short history of banking regulations. Cambridge Journal of Economics, 40(2), 401-426.

Kochan, D. J. (2014). Corporate Social Responsibility in a Remedy-Seeking Society: A Public Choice Perspective.

Kroszner, R. S., & Strahan, P. E. (2014). Regulation and deregulation of the US banking industry: causes, consequences, and implications for the future. In Economic Regulation and Its Reform: What Have We Learned? (pp. 485-543). University of Chicago Press.

February 09, 2023
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