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Bank Complaint – scandals and rip-offs

Bank Complaint – A string of scandals and rip-offs in the financial sector has led to the Government placing a levy on banks and increasing ASIC’s surveillance powers to crack down on financial misconduct. See the link below or read the story here:

Big banks to foot bill for ASIC corporate crime crackdown

By political reporters Dan Conifer and Anna Henderson

The Federal Government will use a levy on the banks and increased surveillance powers to crack down on financial misconduct, as it fends off continued pressure from Labor to hold a royal commission.

Key points:

  • New ASIC commissioner focusing on banking prosecutions will be appointed
  • Kelly O’Dwyer says the Government will strengthen ASIC’s powers for “enhanced surveillance”
  • Treasurer Scott Morrison has been in talks with the regulator over recent days

The levy will provide $121 million over four years for the Australian Securities and Investments Commission (ASIC), helping replace cuts under the former Labor Government and in the 2014 Abbott government budget.

The government will contribute about $6 million in direct assistance. It follows Labor’s promise to hold a royal commission into the banks if elected, but Malcolm Turnbull said today’s announcement was the product of a nine-month review of ASIC.

“This is not a response to anything that’s happened recently,” the Prime Minister told Adelaide radio station FIVEaa.

“This has been an issue that we’ve been addressing methodically.”

He said the Government was also making changes “that will ensure [ASIC] has a sharper edge in its ability to deal with wrongdoing.”

A new ASIC commissioner focusing on banking prosecutions will also be appointed, and Assistant Treasurer Kelly O’Dwyer said the Government would strengthen ASIC’s powers for “enhanced surveillance”.

Earlier this month the head of ASIC Greg Medcraft confirmed previous cuts to the regulator’s budget had affected surveillance powers.

“What we do when we have cutbacks, we look at the priorities of our proactive surveillance and we adjust those, the lower priority ones are obviously removed,” he said.

The political focus on banking impropriety follows a string of scandals and rip-offs in the financial sector.

Govt working to stop costs being passed onto consumers

Kelly O’Dwyer told AM the Government had been in talks with the banks to ensure the increased cost of the levy would not be passed on to consumers.

“We have spoken with them over a number of months,” she said.

Treasurer Scott Morrison has also been in talks with the regulator over recent days.

Opposition Leader Bill Shorten maintains the funding boost is not enough.

“Anything less than a royal commission is covering up for the banks,” he said.

Mr Shorten was also questioned about Labor’s own budget cuts that reduced funding to the regulator, and his previous role as Minister for Financial Services.

“Let’s be straight here, there was an efficiency dividend across government, this is a matter of record,” he said.

“What the Government is trying to do here is blame everyone else.”

Labor earlier this month proposed a $53 million, two-year judicial investigation into financial sector misconduct.

A number of Coalition backbenchers support the Opposition’s push and six Coalition MPs told a partyroom meeting yesterday they were angry with the banks.

Senior Government ministers argue a royal commission would take too long and would not deliver results for victims. END


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