New Straits Times

ASIA SHARES SURGE TO 10-YEAR PEAK

ASIC chairman wants Australia’s 4 major lenders to improve culture and conduct

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SYDNEY

AUSTRALIA’S corporate regulator yesterday took aim at the nation’s four major banks, saying they suffer from “a lot of hubris” and are not used to being taken on by regulators who have recently stepped up scrutiny of the scandal-hit sector.

Australian Securities and Investment Commission (ASIC) chairman Greg Medcraft said improving the culture and conduct of the biggest banks was one of his “unfinished businesses” as he prepared to step down in November.

“I think the big banks are extremely powerful in this country,” said Medcraft at a Reuters Newsmaker event, here.

“When I became chairman I decided that we need to build a war chest to take on big cases. I am not scared of anybody.”

One of the emerging problems in the sector was loan fraud in the mortgage market, said Medcraft.

A UBS survey released this week found factually accurate mortgage applicatio­ns fell to 67 per cent this year, from 72 per cent last year.

There are now approximat­ely A$500 billion (RM1.7 trillion) in what UBS calls “Liar Loans” on Australian banks’ books.

Medcraft did not comment on the accuracy of that report but said loan fraud was “quite a major problem” in Australia.

Regulators have been pushing banks to tighten mortgage lending standards on worries a debtfuelle­d bubble and bust in the red-hot property market could destabilis­e the financial system and hurt the broader economy.

Medcraft also censured the banks on mortgage loan pricing.

Banks have jacked up home loan rates for existing customers while offering discounts to entice new borrowers, even though the official cash rate has been steady at a record low 1.50 per cent since August last year.

“Basically it really just feeds on inertia and I think that is, frankly, wrong, and I do think it feeds in to that lack of trust,” he said.

Australia’s highly profitable banks have been rocked by a slew of scandals recently with the latest and potentiall­y the worst being allegation­s of money laundering against the Commonweal­th Bank of Australia. Reuters

 ??  ?? Australian Securities and Investment Commission chairman Greg Medcraft says he has ‘unfinished business’..
Australian Securities and Investment Commission chairman Greg Medcraft says he has ‘unfinished business’..

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