Australian watchdog seeks staff integration into misbehaving banks to intensify oversight

The Australian Securities and Investments Commission is seeking funding for this purpose.

Corporate watchdog Australian Securities & Investments Commission (ASIC) is seeking funding from the Federal Government to embed its staff in the country’s largest banks in an effort to prompt the misbehaving lenders to toe the line after an ongoing inquiry revealed systemic unethical practices in the sector. 

"ASIC is looking at a new supervisory focus on Australia's largest financial institutions and super funds, which will mean more intensive and dedicated supervision and closer cooperation with APRA," a spokesman for ASIC told the Australian Broadcasting Corporation.

The move for intensified scrutiny comes as a probe by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry revealed systemic and rampant corporate malpractice at the country’s largest banks - Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac Complaints range from lying to regulators to falsification of documents to bribe taking.

Also read: Scrutiny over Australian banks wrongdoing spill over to New Zealand

In fact, report by JPMorgan estimates that the ongoing bank inquiry could easily cut 8% of the country’s finance jobs which would make the losses tantamount to those seen in the 2008 global financial crisis as public sentiment in the banking sector plunges to an all time low.

“The banks didn’t start this way, they’ve just evolved into it. To produce products—whether they happened to be superannuation or a new managed fund—and at the same time offer advice on that, they were able to get fees all the way through the system,” Ian Ramsay, professor of commercial law at Melbourne University told Reuters. 

Photo from Diliff - Own work, CC BY-SA 3.0