Ethical Challenges in the Banking Sector of Australia

Business Ethics

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Article 1
Sarah Danckert, a business courts reporter based in Melbourne, published an
article on the online newspaper of ‘The Sydney Morning Herald’ titled “'Bankers need
to look in the mirror' on 15th November 2018 (Danckert, 2018). Sims slams bankers'
ethics”. In this article, Danckert outlines the key ethical challenges in the banking
sector of Australia which are highlighted by the launch of the Banking Royal
Commission. In this article, Danckert quoted the statements made by Rod Sims who
is correcting acting as the Chairman of the Australian Competition and Consumer
Commission (ACCC). This article also highlights the relationship between banks and
their senior executives and how they engage in unethical practices for personal
gains. Various fines and penalties which are imposed on banking corporations in
Australia are discussed in this article to understand the actions taken by the ACCC
to ensure that integrity is maintained in the banking sector of Australia. The
statements made by Sims in order to warn banking enterprises in Australia to ensure
that they conduct their operations in ethical manner are including in this article which
shows the role of ACCC in order to protect the interest of customers which is
violating by major banking organisations in Australia (Danckert, 2018).
There are several ethical issues which are raised in this article which include
lack of ethics in the banking sectors in Australia. The illegal operations conducted by
banking companies in Australia in order to ensure that they maintain their market
share even if they engage in unethical practices. The role of ACCC in monitoring and
punishing these corporations is also discussed in this article to understand that
challenges faced by the organisation to protect the interest of customers.

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Banking corporations are the key pillars which support the economy of
Australia; these banking corporations influence the lives of many individuals, and
they focus on providing support the businesses operating in the country. However,
the banking enterprises operating in Australia have failed to ensure that they comply
with business ethics policies while conducting their business operations. The
decisions taken by the senior level executives of these corporations are influenced
by the fact regarding whether or not they are able to sustain and expand their market
share in the country (Frost, 2018). These organisations focus on increasing their
customer base through any medium possible to ensure that they are able to increase
their profitability. The competition between major banking institutions in Australia has
increased, and they are focused on increasing their customer base without
considering the impact of their operations. These issues are highlighted in the article
published by Danckert in which she highlighted the challenges which ACCC faced
regarding ensuring that the banks in Australia conduct their operations in an ethical
manner (Danckert, 2018). In this article, the statements made by Rod Sims are
included along with his concerns regarding the unethical practices of Australian
banking institutes. Sims provided that bankers need to have a good look in the mirror
to understand their ethical practices. Danckert highlighted that only two months after
the launch of the banking royal commission in the country, it is shown that the
banking and finance sector is driven by greed. In the inquiry, some of the statements
made by the bankers showed that they could not do away with ethically dubious
practices because they would lose market share.
These statements are made by current and former senior bankers who accept
that they are ready to engage in unethical practices in order to maintain their
profitability in the market. In this article, Mr Sims criticised the regulators for their

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failure to govern the conduct of major banking corporations in Australia. He further
provided that the regulators should continue to do their job by calling out companies
in front to give answers for their failure to comply with ethical duties (Head Topics,
2018). He added that if the banking corporations and their executives think profits
before ethics, then they are in the wrong game. He provided that as far as ACCC is
concerned, it will continue to focus on doing its job. It will focus on highlighting the
unethical conduct of banking corporations in Australia. The article also highlighted
the two key instances in which both National Australia Bank and AMP were involved.
Both the parties allegedly mislead ASIC (the Australian Securities and Investments
Commission) in order to avoid legal regulation compliances. Current regulations are
considered as too “soft” which are not suitable to ensure that the banking
organisations are enforced to comply with relevant legal regulations (Letts, 2018). Mr
Sims provided that the strike rate was 100 percent when he joined ACCC since then
the rate has been reduced to 85 percent. It shows that the regulators have
continuously failed to bring major corporations in the courts for their failure to comply
with ethical principles and legal guidelines.
The key ethical theory which applies to this scenario is the Deontology ethical
theory. This theory is a part of normative ethical theories which argue that
compliance with duties is a major element without which ethical decision cannot be
made by parties. This theory uses rules in order to distinguish right from wrong. This
theory was developed by philosopher Immanuel Kant who argued that ethical actions
follow universal moral laws (Yazdani & Murad, 2015). This theory provided that
people should follow the rules in order to comply with their duties to ensure that they
take ethical actions. This theory emphasis on the maxim of the parties while judging
the morality of their actions. The maxim is referred to an expression of fundamental