An inquiry into Australian banking system has concluded that a culture of greed is driving incidents of abuse and misconduct in Australia’s banks and financial institutions.
Widespread wrongdoing in the banking industry has been exposed by a royal commission this year which is the highest form of public inquiry in Australia.
The interim report by the commission claimed that the banking industry according greater value to profits than people and hence its actions are condemnable. The report has been called a “scathing” assessment by the Australian government.
“[The report] shines a very bright light on the poor behaviour of our financial sector,” Treasurer Josh Frydenberg said. “Australians expect and deserve better.”
Large number of complaints of customer exploitation and corporate misbehaviour were heard by the commission during the inquiry since February.
Question about why such misconduct had taken place was raised by Commissioner Kenneth Hayne in the 1,000-page report.
“Too often, the answer seems to be greed – the pursuit of short-term profit at the expense of basic standards of honesty,” he wrote.
The report also criticised the role of the regulators of banks and financial firms and said that the actions were inadequate.
“When misconduct was revealed, it either went unpunished or the consequences did not meet the seriousness of what had been done,” he said.
The commission had held public hearings around the country and had heard and interviewed over 100 witnesses over the last eight months. The commission also get over 9,300 submissions of allegations of misconduct by banks, financial advisers, pension funds and insurance companies.
The submissions have been dominated by allegations of customer rip-offs and predatory practices. Misconduct by banks and financial institutions has also made the headlines in the country on a regular basis. For example, allegations that the largest bank in Australia was charging fees from customers who were dead have found special mention in the report.
Reckless practices, actions to deceive regulators, bribery rings at banks, and corporate fraud, were among the other issues that the commission heard in the testimonies.
The public have been shocked by the allegations against the banks and has resulted in resignations of top ban executives.
The incidents also prompted the Australian government to bring in and implement stricter penalties for white collar crimes which included increased jail sentences.
The government believed that it has been a long time that there have been allegations of misbehaviour against banks and financial institutions and a number of scandals and therefore the royal commission was necessary.
However, initially, there was reluctance among the government to initiate a royal commission but later had to conceded to the demand and said that a royal commission was a “regrettable but necessary” measure that it had to take to reinstate public confidence and faith in the banking system in the country.
The commission is due to publish its final report and recommendations in February 2019.
(Adapted from BBC.com)