APRA to launch public inquiry into CBA
(28 August 2017 – Australia) Australian Prudential Regulation Authority (APRA) chairman Wayne Byres has placed further pressure on Commonwealth Bank of Australia (CBA), announcing a public inquiry into the lender’s culture, governance and accountability frameworks.
Earlier this month, inquiries revealed alleged breaches by the bank around anti-money-laundering laws, while other incidents involving its financial planning and insurance units helped trigger the inquiry.
"The Australian community's trust in the banking system has been damaged in recent years, and CBA in particular has been negatively impacted by a number of issues that have affected the reputation of the bank," Byres said.
Treasurer Scott Morrison said there had been more than 12 compliance "issues" at the bank since 2008, and the board and management's promises to improve culture at CBA had failed to meet the public's expectations.
"Dramatic action and accountability to restore this trust must be the focus of the CBA's board and management," Treasurer Morrison said.
APRA will appoint an independent panel to lead the inquiry, which is expected to take around six months from commencement. The report will be made public and CBA will cover the costs of the inquiry.
It is the first time that APRA has established a public inquiry of this nature into one of the banks it supervises.
CBA Chief Executive Ian Narev said of the inquiry, “Despite the fact that we have got confidence in the institution, we have got confidence in what we are doing, we are aware of the fact that we have been in the news for the wrong reasons.”
"We fully expect that out of the inquiry will come recommendations for further steps that we can take with the same goal of strengthening trust," he added.
The terms of reference and inquiry members have not been set, but it is expected the inquiry panel will include a range of participants, including those with expertise in corporate culture and financial institutions.
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