Australia: New powers for banking regulator enacted
07 Feb 2018

Australia’s Senate on Wednesday enacted its Banking Executive Accountability Regime (BEAR), which empowers the financial regulator to hold senior executives to account and take other measures towards improving compliance culture within the banking sector.

The legislation, published by Treasury, echoes the United Kingdom’s Senior Managers and Certification Regime, which also holds top bosses directly accountable for compliance missteps.

Under BEAR, banks will have to inform the Australian Prudential Regulation Authority (APRA) of their ‘accountability map’ – outlining the individuals responsible for aspects of their organisations. APRA will also be able to disqualify accountable persons and they could lose their bonuses due.

“Where these obligations are not met, APRA will be empowered to seek substantial fines, more easily disqualify individuals and ensure banks’ remuneration policies result in financial consequences for individuals,” said Treasurer Scott Morrison, quoted in Business Insider.

“These measures will incentivise good behaviour and ensure that banks and individuals are held to account where they fail to meet the standards expected of them.”

BEAR has emerged after a number of reviews surrounding the behaviour of the country’s biggest banks National Australia Bank (NAB), Commonwealth Bank (CBA or CommBank), Australia and New Zealand Group (ANZ) and Westpac.

In 2016, the four had to shell out millions of dollars to customers for billing them for services that were never received, and CBA has been mired in accusations that criminals used its platform to launder dirty cash and finance terrorism.

Following the allegations, financial watchdog Austrac launched an investigation and APRA also appointed a panel to look into issues at CBA.

On Thursday, APRA said the panel will hand over its findings in a final report in April this year.

CBA Chairman Catherine Livingstone AO said in response to APRA’s announcement on the upcoming report: “We’ve acknowledged there are aspects of our culture where we could improve and we have been focussed on upgrading our performance in the areas of governance, operating procedures and regulatory compliance.”

Read more:

Australia: new accountability regime BEAR seeks to shakeup banking sector

New encryption laws could create more problems for banks

AML going south? Money laundering and “non-financial businesses and professions” in Australia

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