Australian Banking Overview: Royal Commission Report

Australian Banking Overview: Royal Commission Report

Table of Contents
Executive Summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Analysis.......................................................................................................................................................3
Banking in Australia................................................................................................................................3
Regulatory and Monitoring Agencies......................................................................................................4
The Royal Commission in Banking.........................................................................................................4
The CEO of the Commonwealth Bank....................................................................................................4
International HRM Issues........................................................................................................................4
Sexual Harassment..................................................................................................................................5
Findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial
Services Industry.....................................................................................................................................5
Reactions of the Government, Opposition and Banking Industry........................................................6
Business and Employment background in the Banking Sector Following Royal Commission Report 6
Bank Manager: Overview and Public Perception....................................................................................7
Impact of the Royal Commission Findings on the Human Resource Management.................................7
Recommendations.......................................................................................................................................8
Conclusion...................................................................................................................................................9
References...................................................................................................................................................9
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Executive Summary
The Banking system is one of the most important systems of the economy of any country. Any
untoward event regarding this industry has its ripple effects on the whole economy. The
Australian Banking system is also going through a tough phase after the expose of a number of
financial scandals in recent times. The whole economy is shaking under the impact and most
importantly people’s trust has been tested. The following report analyzes the effect of these
scandals and the findings and recommendations of the Royal Commission report. The whole
thing is also viewed through the lens of the business and employment background of the sector
and also as a challenge to the human resource management of the banking sector.
Introduction
The Banking industry in Australia is going through a tough and testing phase following the
emergence of a number of financial scandals that a number of reputed banks. The final report of
the Royal Commission which came out in the month of February this year further exposed the
illegal practices that the bank staffs were involved in. The following report is concerned with the
issues of employee relations and the human resource issues in regard to the recruitment of
managers in the current Australian banking scenario. The scope of the report extends to cover all
the related issues of recruitment of mangers from different countries in this uncertain banking
scenario. The following report also discusses the various findings and recommendations of the
Royal Commission of Banking and the reaction of the government, opposition and the banking
sector to the Royal Commission’s report. This report has been specifically made in order to
discuss the impact and consequences of the recommendations made by the Royal Commission
on the employment and practice of the human resource management in the banking industry
Analysis
Banking in Australia
The banking sector in Australia is dominated primarily by four large banks namely the
Commonwealth Bank of Australia, National Bank of Australia, Westpac Banking Corporation
and the Australia and New Zealand Banking Group. There are other financial institutions and
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smaller banks but these four banks dominate the financial sector of Australia. They are major
contributor to the Australian economy. There are some other retail banks which are much smaller
in scale and operate in the regional areas. There are also some Customer owned banking
associations. The foreign banks wishing to operate in Australia have to obtain an operating
license from the APRA and can have two forms: wholesale bank or through an Australian owned
subsidiary.
Regulatory and Monitoring Agencies
The whole framework of the regulation and monitoring of the banking sector lies with the
Australian government which discharges this function with the help of some regulatory
authorities such as the Australian Prudential Regulation Authority (APRA), Australian Securities
and Investments Commission (ASIC), and the Reserve Bank of Australia (RBA). The Federal
Treasury, Australian Competition and Consumer Commission (ACCC) and the Foreign
Investment Review Board (FIRB) are some of the other monitoring authorities.
The Royal Commission in Banking
A Royal Commission formed under the Royal Commission Act 1902 is the highest level of
inquiry that can be initiated against any entity. The Royal Commission inquiry into the Banking
sector was set by the Parliament of Australia after journalists exposed some financial misconduct
in the Commonwealth Bank. Later on the other three major banks such as NAB, ANZ AND
Westpac also got embroiled in the investigation. This Royal Commission was chaired by Justice
Kenneth Hayne.
The CEO of the Commonwealth Bank
The Commonwealth Bank has been embroiled in a number of financial scandals in the last few
years. The former CEO Ian Narev was forced to resign following the scandal of money
laundering and also a failure to assess its money of being used in terrorist activities. The present
CEO Matt Comyn was then called in the Royal Commission inquiry into the financial
misconduct by the major banks of Australia. Later the bank paid $700 million in fine and also
legal costs involved.
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