Although only in its second week of a year long probe, the royal commission enquiry into Australia's financial services industry exposed serious misconduct.
James Shipton, the new head of the Australian Securities and Investments Commission or ASIC, warned in a speech that an dwindling trust poses catastrophic risks to the financial system.
The remarks come against the backdrop of a public inquiry in Melbourne into years of alleged wrong-doing found at several big banks in Australia. The hearings run by a former High Court Judge were likened to «a medieval morality play, with the big four bank taking it in turn to act out the seven deadly sins» by «AFR».
Not Just Rogue Bankers
The ASIC chief took a swipe at the largest lenders, pointing out the problem is not the institutional structure of the system, but the integrity of the people in positions of power in the banks. The claim by Australia's big four banks – ANZ, Commonwealth Bank of Australia or CBA, NAB and Westpac – was down to a few rogue employees was dispelled early in proceedings.
In the first days of the inquest, wrongdoings exposed include failure to correctly report fiduciary issues to the regulators, the improper selling of insurance, and a failure to manage the conflicts of interest in the $1.6 trillion mortgage market.
