Macquarie University/The Lighthouse
After a string of scandals in Australia’s banks, Macquarie Business School research shows that a new regime to make banking executives accountable is working – for now, writes Dr Dominic Canestrari-Soh.
In the wake of a series of misconduct scandals in the banking industry including shonky financial advice, mis-selling of financial products and charging fees for no service, the Banking Executive Accountability Regime, or the BEAR as it is more commonly referred to, was introduced in mid-2018.
Buck stops here: Under the BEAR, banks are required to allocate specific responsibilities to senior executives and directors, in order to stop them hiding behind ignorance and group decision-making.
Despite admitting to millions of compliance breaches that lead to the largest ever corporate fine in Australian corporate history, the corporate watchdog has decided against taking individual action against Westpac executives.
ASIC drops investigation into Westpac Reporter 24 December 2020
The corporate watchdog has confirmed that it has dropped an investigation into the big four bank after its breaches of anti-money laundering laws.
In a statement, Westpac said it had been informed by ASIC that it had dropped its investigation “into matters related to the AUSTRAC proceedings” after the intelligence agency launched civil proceedings against the bank in late 2019.
Westpac’s subsequent settlement with AUSTRAC saw the bank handed down the largest fine in Australian corporate history after it was found to have breached anti-money laundering and counter-terrorism financing rules 23 million times. Advertisement
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APRA releases information paper on BEAR implementation at three large ADIs
The Australian Prudential Regulation Authority (APRA) has released an information paper detailing the findings from its review of the implementation of the Banking Executive Accountability Regime (BEAR) by three of Australia’s largest authorised deposit-taking institutions (ADIs).
APRA completed its implementation review of the BEAR at Australia and New Zealand Banking Group Limited (ANZ), Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) in February 2020. Westpac Banking Corporation was not included due to an ongoing investigation into potential breaches of the Banking Act 1959.
APRA’s review found that all three of the large ADIs had designed adequate frameworks to implement the BEAR and that this has helped to deliver: