28 Aug 2017
By Irene Madongo
Australian regulators are to launch an independent prudential inquiry into governance and accountability within Commonwealth Bank of Australia (CBA), the Australian Prudential Regulation Authority (APRA) announced Monday.
This will be the second regulatory probe CBA will face, after financial intelligence agency Austrac alleged criminals and terror financiers used it to launder millions of dollars.
The aim of the inquiry is to identify governance shortcomings and make recommendations on how they are addressed, as well as consider whether the CBA’s frameworks are conflicting with solid risk management and compliance outcomes.
The decision to launch the inquiry follows a number of issues linked to culture and accountability within the CBA group which have damaged public standing, APRA chairman Wayne Byres explained.
CBA has also “been negatively impacted by a number of issues that have affected the reputation of the bank,” he said, adding that given its position in the Australian financial system, “it is critical that community trust is strengthened.”
CBA said it supported the APRA’s announcement, in a statement on Monday. “We have been working hard to strengthen trust, and will continue to do so. We welcome this opportunity for independent parties to review the work we have already undertaken and advise on what more we can do,” said CBA chairman Catherine Livingstone.
The independent panel would not be tasked with making specific determinations regarding matters that are currently the subject of legal proceedings, or regulatory actions by other regulators, APRA explained.
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