Australia’s largest banks may face prosecution after probe

A government-commissioned inquiry found widespread misbehavior in Australia’s banking and financial services industry that often went unpunished. (AAP Image/Reuters)
Updated 04 February 2019

Australia’s largest banks may face prosecution after probe

  • The banks facing potential charges are Commonwealth Bank, ANZ Banking Group and National Australian Bank
  • Banks have tightened their lending criteria in recent months, anticipating closer scrutiny

CANBERRA: Three of Australia’s largest banks could face prosecution following a yearlong investigation into misconduct recommended tougher oversight and better consumer safeguards.
A government-commissioned inquiry found widespread misbehavior in the banking and financial services industry that often went unpunished.
Commissioner Kenneth Hayne referred 24 incidents of misconduct to regulators for further investigation and possible civil or criminal charges against executives and corporations, including all major banks except Westpac Banking Corp.
The banks facing potential charges are Commonwealth Bank, ANZ Banking Group and National Australian Bank.
Hayne reported to Treasurer Josh Frydenberg who said the financial sector must change.
“It’s a scathing assessment of conduct driven by greed and behavior that was in breach of existing law and fell well below community expectations,” Frydenberg said.
The share prices of banks and other financial institutions have slipped over the past year as Hayne’s inquiry heard evidence of customers being charged fees for services that weren’t provided, dead customers being charged fees and vulnerable people being sold inappropriate financial products.
Banks have tightened their lending criteria in recent months, anticipating closer scrutiny.
Australian Banking Association chief executive Anna Bligh, a spokeswoman for the banking sector, said Hayne’s recommendations represented a huge overhaul and top-to-bottom reform of banking and finance in Australia.
The inquiry would change what financial services and products banks could offer, how staff were paid and create new offenses for wrongdoing, she said.
“Today’s report contains some very tough medicine for banks, including potential court cases,” Bligh said.
She was grateful that Hayne did not recommend tightening of lending rules.
“Banks were very concerned that there may be recommendations that would see lending practice tighten up and perhaps put pressure on the flow of credit into the economy,” she said.
The Australian government responded positively to all Hayne’s 76 recommendations. The government agreed to create a compensation fund for people who lost money from bad financial advice. It also agreed to set rules to help drought-stricken farmers avoid bank foreclosures.
The government accepted the report’s recommendations to strength protections for consumers and improve financial sector accountability and regulatory effectiveness.
The Federal Court would be given jurisdiction to hear corporate criminal charges, which often are not heard for more than two years in congested state courts.
A new oversight authority would also report regularly on the effectiveness of the two regulators in the financial sector, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.


Leaders descend on Beijing for Bloomberg problem-solving forum

Updated 21 November 2019

Leaders descend on Beijing for Bloomberg problem-solving forum

  • The two-day event aims to encourage solutions from the private sector to some of the big challenges the global economy faces today
  • Some 500 senior leaders will attend the gathering, of which about 200 will come from Chinese institutions

Thought leaders from the business world and the global political scene are descending on the Chinese capital Beijing for the New Economy Forum (NEF) run by the information and media giant Bloomberg.

The two-day event aims to encourage solutions from the private sector to some of the big challenges the global economy faces today — trade, climate change, technology and financial volatility. It will also prioritize issues of inclusion, urbanization and governance.

Justin Smith, chief executive officer of Bloomberg Media, told Arab News — which is a media partner for the event — that some 500 delegates would attend the forum, with about 200 coming from institutions within China.

“The reason we’re bringing people together is to produce a platform for discussion between people who represent the new global economy. There is a whole new class of people from Asia, the Middle East, Africa and Latin America who are not represented well in the ‘legacy gatherings’ that take place, which are typically more American and European oriented.

“The idea is to enable people at a principle level — chief executives, ministers, leaders — to have substantive conversations to find solutions to global problems and help mitigate the big issues the world faces. This is not just a talking shop,” he said.

Some 500 senior leaders will attend the gathering, of which about 200 will come from Chinese institutions. “There will be a big Chinese involvement, but this is because of how important China is in the global economy. This really is a one-of-a-kind gathering,” Smith said.

The opening keynote will be delivered by a senior member of the leadership of the Peoples Republic, whose identity has not been officially disclosed amid tight security at the conference venue outside Beijing city center.

While the issue of trade wars between China and the US will be a big issue at the gathering, Smith said that it was not the most important one. “This is not a US-China gathering — it is a global gathering located in Beijing,” he said.

Americans attending the event include former secretary of state Henry Kissinger, as well as Hank Paulson, who was Treasury secretary during the global financial crisis, and Janet Yellen, former chair of the US Federal Reserve.

There is a significant delegation from the Middle East, including Saudi business leader Lubna Olayan, as well as executives and policy-makers from other Arabian Gulf countries.

“The Middle East’s role in the new economy is critical. It has increasingly deep ties with China, but also has strong links with Europe and the West. They are in between western capitalism and state capitalism,” Smith said.