Australia will have a real investigation of the commission in its banking and financial sector, the government has announced.
The prime Minister Malcolm Turnbull said that the commission is Australia’s highest form of public inquiry could help restore confidence in the sector.
Australian banks have been embroiled in scandals of recent times.
Mr. Turnbull had resisted calls for a royal commission for more than a year, but in the face of increasing pressure from the other parties and the members of his government.
“The only way that we can give all Australians a greater degree of security is a royal commission into misconduct in the financial services industry,” he said.
He said that the “regrettable but necessary” decision would also help the economy of the nation by the restoration of confidence.
The royal commission will cover the whole of the financial industry, including pension providers, insurance companies and financial advisers.
The research will have a cost of$75 million (Â£42; $56m) and hand down findings in February of 2019, the government said.
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The recent scandals
Australian banks have faced several accusations of misconduct in the last few years, including most of the financial planning, the rate of manipulation and insurance fraud.Australia the great rate-rigging scandal
In August, the nation’s largest lender, the Commonwealth Bank, was accused of “serious and systemic” violations of anti-money-laundering laws.
Earlier Thursday, the heads of the four largest banks – Commonwealth Bank, NAB, ANZ and Westpac – co-signed a letter in which it reversed its long opposition to a request for information.
“Our banks have consistently argued that the opinion of that other research in the sector, including a royal commission, have no foundation,” the letter said.
“However, now it is in the national interest by the political uncertainty to end.”
It reiterated the thanks which they had “made mistakes”, but it is not detailed in the letter.
Mr Turnbull said the inquiry would examine the responses to the misconduct of the scandals and if the institutions of government or the culture of problems.
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Some of the supporters of the research, including members of the Lord Turnbull of the government, said that the announcement should have come before.
Government MP George Christensen said the prime minister had been “dragged kicking and screaming to this decision.”
The leader of the Opposition Bill Shorten accused Mr Turnbull of letting “the rorts and rip-offs to continue for more than 18 months.”
In the explanation of his previous opposition to a question, Mr. Turnbull said that the government had already taken recent measures to make the banking system more accountable.
These include forcing industry leaders to appear regularly before parliamentary committees, the increase of the regulatory authority, and the imposition of A$6.2 billion charge on the five largest banks.
Lord Turnbull said that he had believed that confidence could be damaged by a research, but now it was more important to resolve the debate definitively.
In a description intended for international markets, the government noted that in Australia the banks remained “undoubtedly strong” in the current regulatory framework.
The research has the approval of the central Bank of Reserve of Australia and industry regulators.