The royal commission investigation, which will last 12 months, held its first hearing in Melbourne on 12 February. It will look to identify financial conduct by institutions that has fallen short of “community standards”.
Submissions
To date, the commission has received 385 public submissions with about one third relating to the way banks deal with personal finance, 17% relating to superannuation and 9% relating to financial advice.
A background paper to the inquiry said Australian banks and finance institutions currently hold assets of A$4.6trn (£2.59trn, $3.59trn, €3.75trn), which is a figure two-and-a-half times the size of the nation’s GDP.
Scandals
The inquiry follows several scandals that have rocked Australia’s financial and banking sector in recent years.
These controversies include the Commonwealth Bank of Australia (CBA), in January, paying nearly A$2m in compensation to clients who received poor advice from five former advisers.
Additionally, ANZ and Westpac have been taken to court by the corporate regulator, the Australian Securities and Investments Commission (Asic), over allegations of rigged inter-bank interest rates.
Commissioner Kenneth Hayne said while Australia has one of the strongest and most stable financial service sectors in the world, there were several established examples of misconduct that raised serious questions about banking and financial practices.
The commission has the power to summon witnesses and take evidence, additionally it can inspect a range of documents and recommend criminal prosecutions.
The first round of public hearings will begin next month.
