Iran Press/Asia: according to Reuters, Australia’s big banks and wealth managers pursued profit ahead of their customers’ interests and viewed regulatory compliance as a cost rather than a guide to proper conduct, a scathing interim report from a commission of inquiry said on Friday.
Treasurer Josh Frydenberg said the interim report demonstrated a need for the corporate regulator, the Australian Securities and Investment Commission (ASIC), to do more to tackle misconduct in the troubled sector.
“They do need to pursue litigation, to impose the penalties that are available to them, rather than some of these negotiated settlements which have seen the perpetrators of these offences or misconduct get off too lightly,” he said.
ASIC did not immediately respond to an email seeking comment.
Australia’s centre-right government late last year proposed new laws to to increase penalties and lengthen prison terms for financial crimes in a bid to strengthen the enforcement powers of the corporate regulator.
Australia’s financial sector has been rocked by months of revelations of wrongdoing stemming from the Royal Commission, driving down share prices and trashing the reputations of some of the country’s biggest companies.
Australia’s four major banks will face questioning over the report before a parliamentary committee in Canberra in October, according to a tweet from parliament’s official account. The commission is due to release its final report in February.
In almost 60 days of public hearings since February, the inquiry has heard instances of bribery, fraud, fee-gouging and board-level deception across the industry.
Some of the more shocking allegations included the charging of fees to dead people and the aggressive selling of a complicated insurance product to a boy with Down Syndrome over the telephone.
The so-called “Big Four” - Commonwealth Bank of Australia (CBA.AX), Westpac Banking Corp (WBC.AX), Australia and New Zealand Banking Group (ANZ.AX) and National Australia Bank - have come under severe scrutiny during the hearings this year, along with wealth manager AMP Ltd (AMP.AX).
The three-volume interim report, however, did not include specific legislative reforms. The sector must now wait until the final report early next year that could recommend major regulatory reform for banks, financial advisers, pension funds and insurers, as well as civil and criminal prosecutions.
In the past eight months, the inquiry has interviewed more than 100 witnesses in public hearings around the country. It has also received more than 9,300 submissions of alleged misconduct by banks, financial advisers, pension funds and insurance companies.
Stories about customer rip-offs and predatory practices have dominated headlines. In one case, the country's biggest bank was found to have charged fees to dead customers, an event singled out in the report.
The inquiry has also heard testimony about corporate fraud, bribery rings at banks, actions to deceive regulators and reckless practices.
The allegations have shocked the public, and led to the resignations of high-profile executives.
In the case of the culture of greed in Australia banking system, recent research published by the Melbourne Institute shows that more than two million Australians fell below the poverty line in 2015. They stuck below the poverty line despite decades of strong economic growth.
While the dominant narrative in developed countries is that the issue of poverty is a temporary phase that does not last long, but the research reveals that poverty persistence amongst the most disadvantaged Australians is much higher than previously thought.
The findings of the research are based on concrete and long term surveys designed to be representative of the entire population.
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Poverty "A Major Concern" in Australia
