The government of Australia has unveiled plans to establish a Royal Commission that will examine the conduct of the country’s financial services firms.
The commission will examine a range of issues including the extent and effect of misconduct by a financial services firm, and how well equipped regulators are to detect and address misconduct. However, it will not examine financial stability or resilience of banks. The commission has to submit its final report on its findings in a year.
The inquiry will cover banks, insurers, financial services providers and superannuation funds (not including self-managed superannuation funds).
“Ongoing speculation and fear-mongering about a banking inquiry or Royal Commission is disruptive and risks undermining the reputation of Australia’s world-class financial system. The Government has decided to establish this Royal Commission to further ensure our financial system is working efficiently and effectively. Instead of the inquisition into capitalism that some have called for, the Royal Commission will take a conventional, focussed approach,” the government said in a statement.
The announcement regarding the commission comes after the chairmen and CEOs of the country’s big four banks, namely ANZ, NAB, Westpac, and Commonwealth Bank called for an inquiry.
In their letter, the banks said: “Our banks have consistently argued the view that further inquiries into the sector, including a Royal Commission, are unwarranted. They are costly and unnecessary distractions at a time when the finance sector faces significant challenges and disruption from technology and growing global macroeconomic uncertainty. However, it is now in the national interest for the political uncertainty to end.”