The banking regulator, the Australian Prudential and Regulation Authority (APRA) announced on Monday it would commence an investigation into the Commonwealth Bank of Australia (CBA) in the wake of recent allegations the CBA, the nation’s largest lender, failed to prevent suspicious money laundering practices.
The Govt has done everything it can to protect the banks, but is now out of excuses. We need a Royal Commission.https://t.co/tZnPi2xxm8
— Bill Shorten (@billshortenmp) August 28, 2017
The Chairman of APRA, Mr Wayne Byres, confirmed this week that “a number of issues” had prompted the inquiry, namely when anti-money laundering federal agency, AUSTRAC, filed a civil case in the Federal Court earlier this month alleging failures of reporting by the bank over more than 50,000 transactions while criminal syndicates were allegedly laundering money through their ATM network. The CBA’s reputation has also been damaged through questionable advice and pressure tactics used within its financial planning arm, CommInsure.
APRA’s inquiry will focus on governance, culture and accountability frameworks and practices within CBA, and will make recommendations as to how they are promptly and adequately addressed. The inquiry is expected to last six months.
The Prime Minister, responding to news of the investigation this week, said the regulator’s probe into the culture and practices of the CBA showed there is no need for a broader Royal Commission into the sector, as action is already being taken. “What you see here is the regulator, APRA, responding swiftly with a targeted inquiry focused on the Commonwealth Bank which will report in six months” Mr Turnbull said.
The Opposition Leader was quick to confirm his displeasure with the inquiry, saying “well here we go again, yet again another inquiry into a bank. When will the Turnbull government finally do what it knows needs to be done and what the Australian people want, which is to have a royal commission into our banks.”
The Treasurer, the Hon Scott Morrison MP, talking on Sky News during the week, confirmed the Opposition was opportunistic wanting a Royal Commission, saying “it’s not about fixing problems in the banking system, it’s about grandstanding by Bill Shorten. What this shows again is a government and its regulators just getting on with the job of taking action now when it comes to the banks”.
The Chairman of the CBA, Ms Catherine Livingstone AO, said the bank recognised practices and cultures within parts of the bank have damaged the broader reputation within the community. “We have been working hard to strengthen trust, and will continue to do so. We welcome this opportunity for independent parties to review the work we have already undertaken and advise on what more we can do” Ms Livingstone said.
It has been confirmed the CBA will foot the bill for the inquiry.
