A government-ordered investigation into Australia’s financial industry has uncovered multiple scandals, ranging from bribery to charging dead people for services.
The investigation began in March and also found that Australia’s bankers lied to regulators and dispensed investment advice that was so bad it lost some customers their homes, according to Bloomberg.
The inquiry revealed thousands of violations, and some of them might lead to criminal charges. Banking leaders in the country have apologized, but the misbehavior is expected to be a major issue in next year’s national elections, and Australians currently view finance as the least ethical part of their economy.
Australia’s bank largely avoided government bailouts and subprime mortgage losses during the 2008 global financial crisis. This may have ended up contributing to the industry’s current wave of scandals, as it meant they avoided scrutiny that could have ended these behaviors.
The country’s scandals have implicated all four of its big lenders: Commonwealth Bank, National Australia Bank, Westpac Banking and Australia & New Zealand Banking Group. One of the country’s largest wealth managers, AMP Ltd., is involved as well.
Equity analysts predict that Australian banks will see a 7 percent profit slump over the next year, and National Australia, ANZ and Commonwealth are all getting rid of their wealth management divisions. These were where most of the scandals are alleged to have occurred.
“I feel like the organization is a much humbler place,” Commonwealth CEO Matt Comyn said in August after the company’s annual earnings report. “We will remember the issues and what led to them and will make sure those mistakes aren’t repeated.” [Bloomberg] – Eddie Small