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 The banking industry refuses to lift its game!

25.09.20.  Most observers always believed that the royal commission into the banking industry, etc, would be fraught with ducking and weaving to end up at, “business as usual,” and they weren’t wrong! Apparently, any correction to the exposed, reprehensible business practices would require meaningful prison sentences!
Westpac’s record-breaking fine of $1.3 billion is reputation-busting and will most likely haunt the banking giant for years, maybe decades, to come. The penalty and the shocking 23 million anti-money laundering breaches that exposed Westpac’s failings are destined to be a long-running case study on the dangers of poor systems and high complacency in a sector riddled with potentially shady criminal customers. Despite factoring in an already eye-watering $900 million as a potential fine, Attorney-General Christian Porter confirmed the proposal was laughed out of the room as “totally inadequate” given the ugly exposure to transactions by child exploitation rings.

Source: ABC

Westpac’s $1.3 billion AUSTRAC money laundering fine raises question of what banks learned from royal commission

Home Affairs Minister Peter Dutton says the fine is little compensation for those impacted.
In a sign to the community that teams of lawyers would not stem Westpac’s pain, Mr Porter said he would ensure the penalty would not be tax-deductible.
According to the agreed statement of claim released today, a review of Westpac’s historical transaction records shows there are now 262 suspected paedophiles who were likely using its funds transfers for child exploitation.
While inadvertent, Westpac’s weak checks and balances on foreign transactions resulted in the bank providing a platform not just for paedophiles but drug gangs, gun runners, tax evaders and slavery rings.
Mr Porter said the Federal Government had a “strident” view that in the case of Westpac, “some of the great failures of a corporate entity in Australian history” deserved more painful medicine.
The blowout in the penalty demanded by Mr Porter and the Prime Minister is clearly designed to send shudders through banking boardrooms around the country — especially large institutions in current negotiations with AUSTRAC after self-declaring breaches.
Westpac chief executive Peter King — who replaced the axed Brian Hartzer — was notably low-profile about the penalty, apologising again in a stock exchange statement.
A source told the ABC that Mr King was unlikely to do media interviews and would let the penalty and comments from Mr Porter speak for themselves — perhaps a sign that Mr King will now keep his head down and concentrate on the reputational rebuild.
But, three years after the Commonwealth Bank (CBA) was forced to review its anti-money laundering compliance to weed out cultural problems and complacency, a few big questions loom.
How much did banks actually learn from the financial services royal commission in 2018, which was, in part, prompted by the CBA’s almost 54,000 anti-money laundering breaches revealed in 2017?
Did the CBA’s $700 million penalty, settled in 2018, send a clear-enough warning to other banks that money laundering breaches that risk massive reputational and financial risk would not be tolerated?
Royal Commissioner Kenneth Hayne constantly referred to a “culture of greed” during the 2018 hearings and his final report was a clear sign that banks needed to get their houses in order.
While the Westpac case did not involve criminal prosecutions, AUSTRAC chief executive Nicole Rose was pressed on the need to take tougher action on individuals rather than a single banking entity.
Ms Rose said there was no criminal activity detected among Westpac executives or the Westpac board and that some executives had already paid a big price with their jobs.
But could the next money laundering scandal or breach of trust embolden prosecutors to pursue criminal charges?
At the moment, that appears unlikely.
But consumer advocates say the Westpac settlement demonstrates that personal executive accountability is still missing in the financial industry.
“No executives or senior management at Westpac have been held to account by either regulators or the courts for this abhorrent failure of management,” according to Choice chief executive Alan Kirkland.
Mr Kirkland said the Federal Government needed to act on its commitment to pass the Financial Accountability Regime, which could be a game-changer in changing Australia’s corporate culture, where executives can hide behind large corporate pay-outs.

{ 8 comments… add one }
  • Simon Thompson 25/09/2020, 5:10 am

    Westpac (and the other 3 ) will be out of business within 12 months. They have 2/3 residential moertgage exposure and the mark to market price is going to sag 80%. Chinese CCP will fly in to buy distressed assets. Don’t say you were not warned!

  • Ian 25/09/2020, 7:16 am

    Okay, 23 million events that have a potential to be criminal. Disgusting.

    Now. With all the data available to the government, (has been for some time now). Tell us how many actually are criminal and how many bad guys you caught.

    Surely bad guys have been caught, we know the bank account details of who paid for the services, they must be facing jail time by now.

    Is there one or two criminals in Oz paying millions of times each, or are there millions of us paying for and creating child porn.

    Or more than likely, the 23 million includes a lot of standard transactions that go from Westpac to one or two suspect banks and a lot of those 23 million are actually legitimate purchases for $2 shoes or 10 cent t-shirts.

    It’s time the convictions started to appear in the news. Surely.

  • Ian A 25/09/2020, 7:16 am

    Just shows, if you want to live the high life as a career crim, go to school and get an MBA. Corporate crime always pays.

  • Pensioner Pete 25/09/2020, 8:43 am

    Royal Commission into banking practices, found to have many banks committing crimes, NOT ONE jailed. Australia needs to take a leaf out of Iceland’s book, where bankers were jailed.

    Fines of any amount, mean nothing to the banks, as they just jack up fees and interest rates to cover, thus we, the people pay the fines in reality.

    Refers: https://www.icelandreview.com/news/icelandic-bankers-sentenced-prison/

  • Botswana O'Hooligan 25/09/2020, 9:00 am

    A question from outside the box. Are the banks supposed to act as policemen and peruse each and every transaction in case it is illegal? That’s a law enforcement job and not a banking job surely.

  • pattoh 25/09/2020, 9:54 am

    YOU CAN NOT BE SERIOUS!!!!!!!!!!
    42% of the Big 4 Australian Banks belong to HSBC, CitiGroup JP Morgan Chase [ & Australian Nomineees which they own]

    Just google any of the 3 entities above +
    money laundering
    drug cartel money
    international arms dealing
    & just for laughs, add judgements & fines ….. it will take milliseconds for the scales to fall from your eyes.

    There really is a dodgy black economy & the biggest players own our banks

    Gee; do you think Government policy is dictated by the loans it need to pay for the promises they make to get or stay in office?

    Who owns the paddlle pop sticks up a few of our premiers?

  • Botswana O'Hooligan 25/09/2020, 11:13 am

    Thought that there would be the odd bite. I worked out that banks were crooks a long time ago when I was a teenager and I also worked out that you can’t beat them so I joined them by buying bank shares. If you have had to support and fend for yourself from age 14 you learn pretty quickly that you go without if you can’t afford to buy something, and that includes a house.

  • Cliff 25/09/2020, 4:14 pm

    Despite what we read above, bank share prices jumped 6% today after Josh Frydenburg announced that all limitations on bank lending (introduced after the GFC of 2007) have been lifted ‘to stimulate the economy’.

    Didn’t Bill Clinton do something similar, making the banks lend money to minorities, many of whom couldn’t repay the loans, which went a long way towards leading to the GFC?

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