Australia markets closed

    +28.60 (+0.41%)

    +0.0015 (+0.19%)
  • ASX 200

    +28.80 (+0.43%)
  • OIL

    +1.06 (+1.60%)
  • GOLD

    +2.60 (+0.15%)

    +1,081.80 (+1.68%)
  • CMC Crypto 200

    +77.13 (+8.18%)

ASIC infiltrates big banks to tackle bad behaviour

Jessica Yun
ASIC staff will be embedded in CBA from today. <i>Photos: Getty, AAP</i>
ASIC staff will be embedded in CBA from today. Photos: Getty, AAP

The Australian corporate regulator has begun trialling a new way of keeping the big banks in line: by planting themselves squarely inside the major institutions.

Staff from the Australian Securities and Investments Commission (ASIC) have kicked off its initiative of “close and continuous monitoring” of the big four banks and AMP from the inside in order to assess governance and compliance structures.

Also read: This is how banks can win your trust back: Deloitte

The then-treasurer Scott Morrison and then-financial services and revenue minister Kelly O’Dwyer announced on 7 August that the government would allocate $8 million to fund ASIC’s plans to heighten supervision of the regulated entities.

The Commonwealth Bank is up first, with a senior supervisor from the regulator to commence working from the bank’s offices from Monday 29 October as part of ASIC’s on-site supervisory initiative.

“This is about the regulator getting in there and being a part of the community in which they’re regulating,” Morrison said in August.

Though the Commonwealth Bank is the first bank to host staff from the ‘corporate cop’, ANZ, Westpac and NAB are soon to follow.

In a statement to Yahoo Finance, the major bank reiterated that it “welcome[d] this move by ASIC as a positive and constructive step forward in the regulatory oversight of the banking industry”.

“We look forward to working closely with ASIC to help produce the best outcomes for all of our stakeholders,” the CBA spokesperson said.

Also read: Yahoo Finance’s 5 minute guide to: Ethical investing

Fronting the Senate Standing Committee on Economics last Wednesday 24 October, ASIC chair James Shipton said the initiative was “all about putting physically on site, inside these financial institutions, our supervisory officers”.

These teams will be led by “very senior chief supervisory officers,” Shipton said.

“By having ongoing and physically present monitoring of financial institutions, we hope that that will help catalyse the behavioural change and the awareness that… is needed by financial institutions.”

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.