Australia’s banking sector gets constructive criticism
The banking sector in Australia has been told to improve dramatically as the Royal Commission has revealed its recommendations.
Australia gets told
After a long wait, the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has produced its final report.
This report has been some time in the making. As reported in September, ANZ, Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac came under fire for their greed, lack of honesty and misconduct.
By late November, the commission had spared no one, with harsh criticisms throughout the Australian industry.
Finally, the commission has closed with a final version of its report.
Australia’s Treasurer Josh Frydenberg says the government has agreed to take action on all 76 recommendations made by Commissioner Kenneth Hayne QC, and plans to focus on “restoring trust” in the financial system Down Under.
Frydenberg says the banking sector “must change and change forever”.
He adds: “The price paid by our community for this misconduct is immense, and goes beyond just the financial.”
The Royal Commission recommends certain regulatory changes and create an “appropriate culture” so financial entities behave more according to the regulation.
The institution advises the reduction of exceptions and carve outs around regulatory points. Removing exceptions and limitations encourages understanding and application of the law in accordance with its purposes.
The regulator also insists that here possible, conflicts of interest and conflicts between duty and interest should be removed.
Some recommendations seek to increase the ways in which the regulators can enforce the law, while others relate to the governance and performance of the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC).
The commission also calls for a disciplinary system for financial advisers, as well as extending the sanctions power under the Life Insurance Code of Practice and the General Insurance Code of Practice.
Lastly, it seeks to increase protections to consumers from misconduct or conduct that falls below community standards and expectations.
If you fancy having a look at the whole (and massive) report, here it is. Happy reading.
