Corporate cops to keep big banks and AMP in check
THE big banks and AMP will be forced to have teams of corporate cops embedded inside their organisations to conduct surveillance and investigate their practices in an attempt to stop them from ripping off Australians.
The move follows damning revelations in the banking royal commission, which has undermined public confidence in Australia's biggest financial institutions, and raised concerns the corporate watchdog, the Australian Securities and Investments Commission, lacks the teeth to rein in gross misconduct of the banks.
ASIC chairman James Shipton told The Daily Telegraph "having ASIC officers physically inside a bank each day, asking the tough questions and getting the answers is a constant reminder to banks to do the right thing and that ASIC is on the job and will take swift action if need be."
Acknowledging ASIC has lacked power, Revenue and Financial Services Minister Kelly O'Dwyer said injecting $70 million into the corporate watchdog under new chairman James Shipton will help it proactively pursue "wrongdoers through the courts" and become the "tough cop on the beat" that Australians expect.
"For the first time ASIC will be funded to embed corporate cops directly within Australia's five largest financial institutions, the Big Four banks and AMP, to monitor governance and compliance actions," she said.
"It will ensure that ASIC is on the front foot when it comes to considering any deficiencies in the governance and compliance structures of these large financial institutions, so as to prevent harm to consumers before it occurs."
Scandals uncovered by the banking royal commission include charging fees to people who have passed away, bank managers paid bribes to use fake pay slips, allowing gambling addicts to increase their credit limits despite maxing out their cards and approving home loans that people could not afford.
The decision to embed corporate cops into the banks was modelled on compliance measures introduced by the Australian Taxation Office, which sent tax officers into big multinational corporations to ensure they were paying the appropriate levels of tax.