Watchdogs to tighten bonds as scandals grow

TWO of Australia’s main financial regulators have struck an agreement to co-operate more closely on investigations and intelligence as a wave of scandals rock the banking industry.

The Australian Securities and Investments Commission and the Australian Prudential Regulation Authority have signed an updated memorandum of understanding to deepen ties at all levels of the agencies.

The MoU was a key recommendation of a Royal Commission into the financial system that found widespread misconduct by institutions including charging fees to deceased customers.

The Commission also criticised the regulators for not doing enough to detect and prevent the misconduct.

“The MoU facilitates more timely supervision, investigations and enforcement action and deeper co-operation on policy matters and internal capabilities,” ASIC Chair James Shipton said in a joint statement.

The agencies were meeting regularly and working on areas of common interest, including data, thematic reviews, governance and accountability. The agreement comes as Westpac Banking Corp reels from accusations by the country’s financial crime watchdog, AUSTRAC, of enabling 23 million payments in violation of anti-money laundering laws, including between known child exploiters.

The scandal has seen out the bank’s CEO, chairman and head of its compliance committee, and large investors and their proxies have called for more heads to roll at Westpac’s annual general meeting on December 12.