The people that gave credit in these risky situations are making record profits and their dubious banking practices have made them the subject of a royal commission.
Sure they’ve been theoretically ‘punished’ for lending too much by making a little bit less profit but it sure doesn’t seem like much of a corrective action to me.
That's because the government is corrupt. If the government actually let the banks fail and bailed out the citizens instead the bad banks would be gone, the citizens would have put the money into the economy again, and you'd have an economic miracle happening quickly, as it is common after such resets.
Government subsidized failure is one of the main reasons why communism never worked out. Bad companies need to fail and make way for more efficient or less stupid companies. Otherwise you end up with all your companies operating at roughly the same efficiency as the government (close to 0), because there's no incentive for them to avoid risk. They're rewarded either way.
Sure they’ve been theoretically ‘punished’ for lending too much by making a little bit less profit but it sure doesn’t seem like much of a corrective action to me.