“Trust deficit” poses catastrophic risk to the financial system - ASIC
(20 March 2018 – Australia) The financial system is at serious risk due to a widening “trust deficit”, the new chairman of the Australian Securities and Investments Commission has warned.
James Shipton, who took up his role at the corporate regulator six weeks ago urged the banks to adopt stronger ethical standards to avoid more intrusive regulation. Mr Shipton said he will continue to keep pressure on the banks but would prefer the industry to self-regulate and “not wait for regulatory catalysts”.
In his first speech since becoming chairman at the annual ASIS Annual Forum in Sydney, Mr Shipton said “we are still facing a trust deficit. The trust deficit is something that needs to be resolved because if it is not resolved, there is an interdependency between trust in the people in finance, and trust in the infrastructure.”
A decline in the trust in the financial system infrastructure, such as the payments system would be “catastrophic,” he added.