Australia’s banking regulator will launch investigations into the ongoing Westpac scandal and could use newly expanded powers on its directors and executives.
The Australian Prudential Regulation Authority (APRA) will launch investigations into allegations against Westpac made by AUSTRA last month over payments linked to child exploitation.
«Given the magnitude and nature of the issues alleged by Austrac, APRA is aiming to ensure that fundamental deficiencies in Westpac’s risk management framework are identified and addressed and that Westpac and those responsible are held accountable as appropriate,» the regulator said in a statement.
Expanded Powers
According to APRA, the investigation will allow the usage of newly expanded powers for the first time including «enhanced investigative powers» and the implementation of the Banking Executive Accountability Regime (BEAR) in 2018.
In addition to broader investigations into top executives, the APRA will also initiate a review of Westpac’s risk governance and impose an increased capital requirement of A$500 million ($343 million) to «reflect the heightened operational risk profile of the bank».
«While Westpac is financially sound, there are potentially substantial gaps in risk governance that need to be closed,» said APRA deputy chair John Lonsdale.
