November 30, 2017
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.
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.