BCN-40,41 ‘Greedy’ Australian banks pilloried by scathing official inquiry

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‘Greedy’ Australian banks pilloried by scathing official inquiry

SYDNEY, Sept 28, 2018 (BSS/AFP) – Australia’s scandal-plagued banks were
accused of putting profits before people and of failing to meet “basic
standards of honesty” on Friday, as an official inquiry offered a damning
assessment of the sector.

The nearly 1,000 page Royal Commission interim report painted a picture of
a sector defined by greed, forgiving of misconduct and frequently flirting
with illegality.

Banks, insurers and other financial houses put “the pursuit of short-term
profit at the expense of basic standards of honesty” the report said, after
almost a year spent considering 10,000 submissions and hearing from more than
100 witnesses.

Asking why this happened, the report concludes that: “Too often, the
answer seems to be greed.” It goes on to detail examples of cash-stuffed
envelopes being taken to pass dubious loans and fees being charged to
customers who had died up to a decade before.

The Australian Banking Association said the text “deserves a thoughtful
considered response,” but expressed contrition.

“Make no mistake, today is a day of shame for Australia’s banks,” said the
lobby group’s chief executive Anna Bligh.

“Having lost the trust of the Australian people, we must now do whatever
it takes to earn that trust back.”

Australia’s financial giants — such as Commonwealth Bank, NAB, ANZ and
Westpac — are among the world’s most profitable financial institutions.

They have largely avoided the shackles placed on US and European banks in
the wake of the global financial crisis, which Australia sailed through
largely unscathed.

– Watching the watchdogs –

The commission also accused government regulators of being asleep at the
wheel.

“When misconduct was revealed, it either went unpunished or the
consequences did not meet the seriousness of what had been done,” the report
read.

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“Much more often than not, when misconduct was revealed, little happened
beyond apology,” it said.

The interim report did not make recommendations about potential regulatory
changes, but focused on the need for a shift away from a culture that echoes
the rapacity of traders in the 1980s film “Wall Street”.

The centre-right government, which had firmly opposed the creation of the
commission, embraced its findings that will resonate with many Australian
voters.

Australian Treasurer Josh Frydenberg described the report as a “frank and
scathing” assessment of the sector.

He vowed to take steps to “restore confidence and trust” in institutions
vital to Australia’s economy but stopped short of committing to new
regulation or oversight.

Financial stocks on the Australian Securities Exchange traded up almost
two percent shortly after the report was published and on the minister’s
comments.

Many of the accusations contained in the report had already been made
public and the absence of a firm move toward further regulation is likely to
have buoyed bank shares.

The opposition Labor Party said if it wins a general election, expected
next year, it would introduce a task force to implement sectoral reforms.

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