AUSSIE REGULATORS GRILLED
Inquiry exposes widespread wrongdoing and predatory behaviour at top institutions
AUSTRALIA’S top financial regulators took to the stand at an inquiry into financial-sector misconduct yesterday to defend their low-key enforcement of laws designed to protect the country’s A$2.6 trillion (RM7.77 trillion) pension system.
Under questioning at the Royal Commission of inquiry, the Australian Prudential Regulation Authority (Apra) said its “behindthe-scenes” approach to dealing with breaches by large institutions was to limit damage to pension fund members.
The Australian Securities and Investments Commission (Asic), the corporate regulator, was also accused by a barrister assisting the inquiry of “bluffing” rather than acting to stop malpractices by the country’s top financial institutions.
The inquiry has exposed widespread wrongdoing and predatory behaviour at top financial institutions, shocking the country and piling pressure on the government to do more to check finance-sector greed.
Reserve Bank of Australia governor Philip Lowe lambasted the country’s biggest banks in comments before a parliamentary economics committee in Canberra yesterday.
“I have to say that I have been incredibly disappointed and in many, many cases appalled by what has come out from the Royal Commission,” said Lowe.
Asic deputy chairman Peter Kell told the inquiry there was a “very high likelihood” that it would soon launch proceedings against banks and other institutions which had wrongfully taken about A$1 billion from their customers without providing services, dating back to 2008.
Michael Hodge, a barrister assisting the inquiry, also sought an explanation from Asic about why the corporate regulator had only “bluffed” and not launched legal action against Australia and New Zealand Banking Group (ANZ), which has sold over A$3 billion worth of complex pension products without proper advice to customers.
After an investigation that started in 2014, the regulator drafted court documents in May last year but the bank agreed to stop the practice and the suit was never filed.
Asic senior executive Tim Mullaly accepted that was the case, saying an undertaking would have been a faster way to stop the bank. As part of the undertaking, ANZ has promised to stop the practice from today.