Fri, Dec 01, 2017 - Page 10 News List

Australia bows to pressure with inquiry into bank misconduct

AP, CANBERRA

The Australian government yesterday bowed to growing pressure by announcing a high-level inquiry into misbehavior in Australia’s financial sector.

A royal commission — the highest form of investigation in Australia — is to review the banking, pension and financial services industries, Australian Prime Minister Malcolm Turnbull said.

The decision follows a series of scandals over money laundering and other abuses.

Turnbull’s conservative coalition has been resisting calls from the center-left Labor opposition party for such an inquiry for about two years.

His stance changed after the chief executives of Australia’s four largest banks yesterday wrote to the government requesting a “properly constituted inquiry.”

The banks said uncertainty was “hurting confidence” in the industry.

By establishing a royal commission, Turnbull has staved off a bid by Labor to have the Australian parliament conduct its own inquiry into misconduct allegations.

“Ongoing speculation and fear-mongering about a banking inquiry or royal commission is disruptive and risks undermining the reputation of Australia’s world-class financial system,” Turnbull said in a statement.

“The government has decided to establish this royal commission to further ensure our financial system is working efficiently and effectively,” he added.

However, Turnbull said the royal commission “will not put capitalism on trial.”

The inquiry was welcomed by Jeff Morris, a financial planner who in 2013 exposed a culture of corruption and cover-up in Commonwealth Bank of Australia, the nation’s largest bank, which had been targeting vulnerable customers.

Morris earlier had accused the government of “running a protection racket for the banks” by rejecting a recommendation for a royal commission inquiry into Commonwealth Bank.

Australian lawmaker George Christensen said many of his constituents had complained of banks’ dishonest behavior.

“There has been quite clearly unethical action from the evidence that I have seen ... fraudulent and perhaps even criminal action,” Christensen said. “This is systemic.”

The royal commission must be wide-ranging to end scandals and to bring about substantial reform, Maurice Blackburn Lawyers principal Josh Mennen said, adding that the scandals reflected deeply ingrained problems that have financially ruined thousands of Australians.

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