CBA knew of lax oversight

THE Commonwealth Bank has confirmed the existence of an explosive internal review of the bank’s compliance with Australian and global antimoney laundering and terrorism financing laws.

It reveals widespread failures across numerous divisions within the lender.

The CBA yesterday responded to revelations by Sky News Business on Thursday night that billions of dollars worth of transactions in the US, Europe and Asia had not been properly monitored, which could expose the bank to investigation by global regulators.

The document also confirms senior executives at the bank were aware of large-scale gaps in the bank’s compliance frameworks, well before Austrac filed its 600-page statement of claim against the bank last month, alleging more than 50,000 breaches of antimoney laundering rules.

“The document referred to in those media reports was a working document, proposing technology enhancements as part of our ongoing program of action, including the automation of tasks currently undertaken manually,” the CBA said in a statement yesterday.

Responding to the reports, Finance Minister Mathias Cormann said the CBA had some “serious work to do” and that these were the latest “very serious” allegations in a series of serious compliance issues.

“It goes to the heart, obviously, of the credibility of a very important financial institution in Australia,” he said.

“That is why the Govern- ment has welcomed the independent review initiated by APRA (the Australian Prudential Regulation Authority) to look very closely at the governance culture and accountability frameworks and practices of the CBA.”

The bank said more than $230 million had been spent in a program to “strengthen policies and processes related to financial crimes compliance”.

The confidential review of the bank’s compliance was presented to senior bank executives in February and showed non-existent or minimal transaction monitoring across almost two thirds of the CBA’s institutional banking and markets division.