Misconduct in the banking, superannuation and financial services industry

Misconduct in the banking, superannuation and financial
services industry
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Table of Contents
By applying three or more specific cases used in ‘Volume 2 case studies’ of the Interim
report of the Royal Commission, and by applying agency theory, explain how and why “a
culture of greed ... was the result of remuneration misincentives”............................................3
The ASX Corporate Council provides eight central corporate governance principles and
recommendations (2014, 3rd edition) that companies listed on the Australian Securities
Exchange must comply with. Given that listed banks and financial services’ companies must
comply with the ASX corporate governance principles, why are there so many examples of
poor (unethical) corporate behaviour, as has been revealed by the Royal Commission?..........3
Compare the behaviour and actions of the Australian banking and financial services sector to
the USA banking and financial services organisations implicated with the Global financial
crisis...........................................................................................................................................4
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By applying three or more specific cases used in ‘Volume 2 case studies’ of the Interim
report of the Royal Commission, and by applying agency theory, explain how and why
“a culture of greed ... was the result of remuneration misincentives”
The case study is related to consumer lending ‘NAB Introducer home loans’ Here. the third
parties or the introducers received commission on the reference of the loan application
towards NAB. The maximum loan that was referred was for the home loan. The commission
that was paid to the Introducers were a part of the loan amount that was given to the
customers when the loan was approved and the money was withdrawn (Huntand Terry,
2018). Introducer earned a handsome amount of $ 488,000 in four years. The false cases that
the employees of NAB did was applying the signatures to the forms that were consent which
had effects triggering a payment of Commission to the introducer where there was no
warranty and the other thing was the bank staffs were accepting the false documents of the
customers for documentation from those who had applied for home loans. The employees did
not even had face to face interaction with the customers for any verification. They did not
even show the relationships with the Introducers. There were a number of branch managers
that were involved in this case. This shows that how the staffs had become to earn extra
money. This was a bad thing that had happened in the banking and financial sector of
Australia. There were no security and the loans were given like anything without verifying
the documents of the customers where in the later investigation it showed that all the
documents of the customers were fraud.
The other case study is of CBA broker relations and accreditation. In this case study CBA
gave rights to the brokers for giving them referrals about loans where 41% of the total home
loan customers were given by the broker cell (Hoyle, 2018). The brokers had an unit named
Australian Credit Licence. The brokers were controlled by this unit and there were no
connections among the brokers and the bank. The referrals were submitted to the Australian
Credit Licence by the brokers and those were further submitted to the bank. Even the
customers had no idea about the amount of commission that was to be paid to the brokers
from the loan amount. This case led to the rise of false applications and even false
commission as there was no contact between the brokers and the bank. This led to the false
documentation of both the parties and there was huge chaos that took place in the banking
and finance departments of Australia. It so happened that the brokers acted as the agents of
CBA during their conversation with the customers which was also a wrong thing that the
customers and the employees did not have knowledge about. This led to chaos in the people’s
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