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| The Royal Commission interim report concluded that 'too often' banks in Australia were defined by greed and flirted with illegality |
Australia's scandal-plagued banks were accused of putting profits before people and of failing to meet "basic standards of honesty" on Friday, as an official inquiry offered a damning assessment of the sector.
The nearly
1,000 page Royal Commission interim report painted a picture of a sector
defined by greed, forgiving of misconduct and frequently flirting with
illegality.
Banks,
insurers and other financial houses put "the pursuit of short-term profit
at the expense of basic standards of honesty" the report said, after
almost a year spent considering 10,000 submissions and hearing from more than
100 witnesses.
Asking why
this happened, the report concludes that: "Too often, the answer seems to
be greed." It goes on to detail examples of cash-stuffed envelopes being
taken to pass dubious loans and fees being charged to customers who had died up
to a decade before.
The
Australian Banking Association said the text "deserves a thoughtful considered
response," but expressed contrition.
"Make
no mistake, today is a day of shame for Australia's banks," said the lobby
group's chief executive Anna Bligh.
"Having
lost the trust of the Australian people, we must now do whatever it takes to
earn that trust back."
Australia's
financial giants -- such as Commonwealth Bank, NAB, ANZ and Westpac -- are
among the world's most profitable financial institutions.
They have
largely avoided the shackles placed on US and European banks in the wake of the
global financial crisis, which Australia sailed through largely unscathed.
Watching the watchdogs
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| Treasurer Josh Frydenberg vowed to take steps to 'restore confidence and trust' in Australia's banks |
Watching the watchdogs
The
commission also accused government regulators of being asleep at the wheel.
"When
misconduct was revealed, it either went unpunished or the consequences did not
meet the seriousness of what had been done," the report read.
"Much
more often than not, when misconduct was revealed, little happened beyond
apology," it said.
The interim
report did not make recommendations about potential regulatory changes, but
focused on the need for a shift away from a culture that echoes the rapacity of
traders in the 1980s film "Wall Street".
The
centre-right government, which had firmly opposed the creation of the
commission, embraced its findings that will resonate with many Australian
voters.
Australian
Treasurer Josh Frydenberg described the report as a "frank and
scathing" assessment of the sector.
He vowed to
take steps to "restore confidence and trust" in institutions vital to
Australia's economy but stopped short of committing to new regulation or
oversight.
Financial
stocks on the Australian Securities Exchange traded up almost two percent
shortly after the report was published and on the minister's comments.
Many of the
accusations contained in the report had already been made public and the
absence of a firm move toward further regulation is likely to have buoyed bank
shares.
The
opposition Labor Party said if it wins a general election, expected next year,
it would introduce a task force to implement sectoral reforms.
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