(11 August 2017 – Australia) The Reserve Bank of Australia’s (RBA) governor Philip Lowe has condemned the banking sector for focussing on short-term profits, and a negative culture.
“Service has taken a back seat to sales,” he told the Senate economics committee. “The desire for short-term profit has meant not enough attention is being paid to risk management, trust has been strained, banks know that.”
“It's very serious. We have laws for reasons, banks should not be doing money laundering and they should know who is opening their accounts,” he said.
“If shortcomings are identified then there needs to be accountability, through the court and internally through the organisation.”
He added that the banking system does an “incredibly important job” and the Australian economy has benefited through jobs and wealth creation but that it needed to address these cultural issues.
The comments follow chairman of the Australian Securities and Investments Commission (ASIC), Greg Medcraft saying the regulator was probing key legal questions raised by the issues facing the Commonwealth Bank of Australia.
Medcraft said ASIC did not become aware Austrac had launched an investigation into the CBA until the action was launched, even though he had met with CBA chairman Catherine Livingstone two days before Austrac filed the lawsuit.