The punches keep on coming for the Commonwealth Bank of Australia (CBA).
First they were sued by financial intelligence agency AUSTRAC for allegedly allowing criminals and terror financiers to launder millions of dollars through CBA accounts.
This marks the first lawsuit of its kind against any major Australian bank.
Now CBA is facing heat from the Australian Prudential Regulation Authority (APRA). APRA uncovered what is described as a culture of compliancy, and a board that failed to provide adequate oversight.
Treasurer Scott Morrison expects more executives at CBA will go after the ‘damning’ report by banking regulator.
‘…it found there was a complacent culture, dismissive regulations, an ineffective board that lacked zeal and failed to provide oversight, a lack of responsibility and ownership of key risks by senior executives, a remuneration framework that had no bite and they were reactive, slow and under-resourced systems and processes internally” Morrison told reporters.’
Morrison also warned all board directors of the seriousness of their position:
‘This should be a wake-up call for every board member in the country, particularly those who are the custodians of the savings shareholdings of millions of Australians, they expected those shareholders of board member and they have been let down, terribly.’
But all the CBA could offer APRA was an enforceable undertaking in response to the report and admission of wrongdoing from its CEO.
CBA chief admits wrongdoings
In an interview with The World Today, the bank’s new chief executive Matt Comyn admitted errors, saying:
‘I think there was a number of things that we, as leadership team and senior executive team, would’ve done differently.’
But a lack of accountability seems to be a reoccurring theme for everyone involved in the CBA scandal.
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How was the rotten culture to which APRA refers — the ‘lack of responsibility’, the ‘complacency’ and the board’s ‘failure to provide oversight’ — allowed to fester?
Simple, bank executives operated without fear of penalty.
It would do good to remember that the federal government called for the APRA inquiry in a bid to ward off a royal commission. And now? We are all but tripping over inquires, regulators and now a royal commission for misdeeds committed by our financial institutions.