Australia banks could face criminal charges after Royal commission
Australia’s biggest banks faced the prospect of criminal charges for ripping off customers as part of the findings of the Royal Commission into their conduct.
Commissioner Kenneth Hayne also issued a stern warning to regulators to lift their game or have their powers removed.
“In almost every case, the conduct in issue was driven not only by the relevant entity’s pursuit of profit but also by the individuals’ pursuit of gain whether in the form of remuneration for the individual or profit for the individual’s business. Providing a service to customers was relegated to second place. Sales became all important,” he said.
"Rewarding misconduct is wrong. Yet incentive, bonus and commission schemes throughout the financial services industry have measured sales and profit, but not compliance with the law and proper standards. Incentives have been offered, and rewards have been paid, regardless of whether the sale was made, or profit derived, in accordance with law."
In response, the government said it would act on all 76 of Hayne’s recommendations. Treasurer, Josh Frydenberg, conceded that “from today the sector must change, and change forever". The government had fought tooth and nail to avoid calling the commission.
A compensation scheme of last resort to help victims of banking misconduct would be established, he said. The scheme would be funded by the industry, which would be compelled to pay as a condition of their financial licences.