Government Calls Royal Commission into Banking and Financial Services

The Federal Government has announced that it will establish a Royal Commission into alleged misconduct of Australia’s banks, and that it will also cover life insurers and other financial services providers.

Federal Treasurer, Scott Morrison

In a media release, Federal Treasurer, Scott Morrison said the inquiry would examine the conduct of banks, insurers, financial services providers and superannuation funds, and how well equipped regulators are to identify and address misconduct.

According to the terms of reference released by the Treasurer, the Royal Commission will examine “the nature, extent and effect of misconduct by a financial services entity, including by its directors, officers or employees, or by anyone acting on its behalf”.

Also under examination will be “any conduct, practices, behaviour or business activity by a financial services entity that falls below community standards and expectations”.

“We will ensure that the Inquiry will not defer…any proposed or announced policy, legislation or regulation that we are currently implementing.”

Morrison said the reason for establishing the Royal Commission was due to “ongoing speculation and fear-mongering” about any form of examination of the banking sector which was “…disruptive and risks undermining the reputation of Australia’s world-class financial system”.

“This will be a sensible, efficient and focussed inquiry into misconduct and practices falling below community standards and expectations,” he said.

“We will ensure that the Inquiry will not defer, delay or limit, in any way, any proposed or announced policy, legislation or regulation that we are currently implementing,” Morrison added.

The move by the Federal Government follows a call by the heads of the major banks for the establishment of an inquiry, overturning their past opposition of an examination of their activities.

The Royal Commission will be headed by a serving or former judicial officer appointed by the Government.

The Commission will be required to provide an interim report by September 2018 and a final report, with recommendations, within 12 months of its establishment.

  • emkay

    “We will ensure that the Inquiry will not defer, delay or limit, in any way, any proposed or announced policy, legislation or regulation that we are currently implementing” Good one Morrison, you can now implement anti-competitive LIF lie without admitting it was and is a complete smokescreen aimed at destroying IFA’s. Whatever happened to LNP helping small business, now so they are so far Left they are helping destroy!

    • Ken

      How can you pass legislation that was conceived in the era that this commission is investigating ?? Would it not make sense to hold off look into it and then decide what to do ? It would make a lot more sense and cost far less than having to rewind it should it be floored ( which we all know it is )
      This has a be brought on due to the fact that labor could well win the next election and proceed with it anyway and they will have the knives out well and truely where LNP will bend this around to suit both the banks and government
      Wait and see millions of dollars later there will be no adverse findings and things will remain corrupt

  • alistsir

    A royal commission. Another one. I recall these costing lots of money, our money, lots of ceremony and evidence and findings so here we go again. Our industry has had several inquries, going some time back. Wallis, Ripol, Murray among the more noteables along with copiuos legislation strangling the industry along with changes in corps law, FOFA, LIF all costing lots and lots and lots of money to no effect. And now we have a royal commission. These have cost money as well. Aboriginal deaths in custody 1991. Money spent with nothing done. More foolish nonsense. Here’s a thought. Jail for the wrong doers. Yes. After all the loss of ones liberty I’m sure will correct bad behaviour. Lets start at the top and make this wide ranging. From executives and CEO’s down. Superannuation Trustees also including those from the Industry Super Network. I recall when Wells Fargo, the giant American Financial Services company CEO John Stumpf was questioned on bad behaviour in a congressional inquiry, the words criminal indictment when mentioned being applicable to Stumpf sent severe shivers down the spine of executives whose bonuses and outragreous remuneration was brought into the spotlight. Yes. Jail is the answer. Not another damn time wasting foolish Royal Commission. If we must have this though, lets also have the Industry Funds, Banks, Insurers, Direct Insurers, in fact EVERY form of financial services brought into the spotlight. Why you say? When Bill SHorten was Financial Services Minister in 2011, he passed laws governing payday lenders to enable them to thieve from the most vulnerable in society. His hypocrisy and that of Labors is just that . BS – (Bill Shorten). As for the Libs, they have simply forgotten about the business owners and both have forgotten about the one thing that matters to all of us. Australia. Sad.

  • C.

    So,a Royal Commission into the Banking has now been expanded to include financial services providers?…Does that mean Financial Advisers as advice providers are now again under the interrogatory spotlight of a Royal Commission after being under relentless, intense and misaligned scrutiny for nearly a decade, or is the focus to be on the product provider themselves, rather than the delivery of the advice?
    Surely, this is so transparent that the Liberal Govt just could not bring themselves to announce a Royal Commission into the banking sector in isolation as they have been determinedly protective of their big 4 friends and when Kelly O’Dwyer is an ex-NAB Exec then how far do you really think this is going to delve??
    The only reason this has been expanded to other areas is because of political pressure and because the Libs can then say to the banks….”well it’s just not about you guys…we will try and take the focus away from just one segment to disperse the attention”.
    The game is so obvious, but then so are the Govt’s and O’Dwyer’s failings regarding Financial Services over such a long period of time.

  • Jeremy Wright

    The FSC should be the first organisation that needs to be hauled before the Royal Commission.

    They are the spokesperson for the Big Banks and affiliated Life Companies that have perpetrated and been a major influence regarding the LIF Debacle.

    The evidence is stacked high and in clear view, which should make it easy for the AFA and FPA to present to the Commission.

    This is the time for the associations to clear the decks and rebuild trust amongst their decent adviser members, who have felt let down by the associations they belong to and pay membership fees to, by bringing the truth to light and putting the spotlight on the disgraceful actions of the FSC once and for all, so they are brought into line and are forced to act in a responsible manner.