Finance is Australia’s biggest industry, and its banks are among the most profitable in the world.
But now, the nation is the highest form of public inquiry is the examination of the part of the nation, the banks and financial institutions.
The royal commission of inquiry following a decade of scandals that have rocked the sector.How dominant are the Australia, of the banks?
Australia’s “Big four” – Commonwealth Bank (CBA), ANZ, National Australia Bank (NAB) and Westpac – collectively about 80% of the banking market.
A recent government-funded report has found that the sector was “unquestionably strong”, but was criticised for the levels of competition and transparency.
What were the scandals?
All four major banks have faced allegations of misconduct. They include:
Risky financial advice: the Bank of Commonwealth customers have lost millions of dollars due to inappropriate advice from financial planners.
Impaired mortgage loans: Approximately 20 NAB bankers were dismissed after the issuance of home loans based on incorrect or incomplete documentation.
Rate rigging lawsuits: All the four banks were accused of manipulating a key benchmark interest rates.
Alleged violations of the anti-money laundering laws: the Commonwealth Bank has admitted that it was late to disclose 53,000 suspicious transactions at the atm.
Analysts estimate that the Australian banks have paid out more than$1 billion (£550m; $780m) in penalties and compensation since the financial crisis of 2008.
Despite this, the giant bank continued to show large profits, sometimes to record levels.Why a survey deemed necessary?
The momentum has increased since the public continues to debate as to whether the banks have put profits and shareholders ahead of its customers.
The prime Minister, Malcolm Turnbull, had initially opposed an investigation, but agreed in December that it was necessary to restore confidence in the sector.
He said that the royal commission would extend to the entire financial sector, including superannuation or pension contributions – insurance and wealth management sectors.
The largest banks, said they welcomed the investigation as a means to put an end to the “political uncertainty”.What will be studied?
The catchily-titled ” Royal Commission of inquiry on Misconduct in the Banking sector, the Pension and the Financial Services Industry will examine the fault that has already been established in the area, as well as allegations of other wrongdoing.
It also has the mandate to look at possible gaps in the way the industry is controlled and regulated.
Anyone can make representations to the investigation of the bank’s customers, among those who should be giving plenty of input.
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Australia has a great rate rigging scandal
The commissioners have the power to examine documents, to call witnesses and evidence. The survey is planned for 12 months.
The banks say they remain confident in the process, but some industry observers have predicted further damaging revelations.What might happen in the future?
The survey may make recommendations for the reform of the industry, and even prosecution, if it finds any wrongdoing.
But it cannot award compensation for the individual cases, or even directly say the institutions to take measures. But it can offer the repair systems.Could the survey fall short?
Critics have said a year of the survey may not be able to get enough to investigate all the allegations.
The most recent of the royal commission of inquiry, which covered child sexual abuse, over a period of four years.