Royal Commission into the Finance Sector

This assignment examines the Royal Commission inquiry into Australia's finance sector, particularly its focus on Commonwealth Bank (CBA). It explores arguments for and against the commission's effectiveness, considering its broad terms of reference, limited time frame, and potential impact on CBA's corporate governance. The assignment also discusses the financial burden of the inquiry and draws parallels to past Royal Commissions, such as the one into Aboriginal deaths in custody.

Banking Royal Commission: Waste of money and time?
With the announcement of the Royal Commission inquiry into the finance sector, the
Malcolm Turnbull government gave a hot topic for debaters just before Christmas. The Prime
Minister announced the decision after the four major banks of Australia- Westpac, ANZ, NAB
and the Commonwealth Bank sent a letter of support for the inquiry. Kenneth Hayne, former
judge of the honorable High Court is set to lead the inquiry team that would start proceedings
starting February 12.
The Labor party has welcomed the decision of the government and designated it as the
victory of the people who are the most affected by the fraudulent activities of the banks. Bill
Shorten, opposition leader described the announcement as a “victory for Labor”. He further aired
his view that the commission would bring out the hidden secrets of the banks and give justice to
the people. It needs mentioning that the opposition party has been demanding for the Royal
Commission inquiry into the corporate affairs of the Commonwealth Bank for three years. The
bank has been in news for its repeated breach of the code of conduct being involved in 55,000
cases of terrorism financing and many others, as reported by AUSTRAC. Many experts are of
the view that the Royal inquiry, with its immense powers, would be able to dig in deep into the
scandalous world that surround the CBA culture.
In reality however, the Royal Commission has a daunting task to scrutinize every aspect
of the financial sector including banks. Some have also questioned its effectiveness viewing the
broad and lengthy terms of references. These terms of references further forbid the Royal
Commission from reproducing other inquiries. Due to this fact, they are of the view that the
misconducts of the Commonwealth Bank may not even be touched. Another concern regarding

the Royal inquiry’s influence on CBA is its limited time. The commission has only a year to
investigate everything and produce those before the public. However, the inquiry would have
been effective had it given the license to carry on for several years. To say that the commission
would actually have an influence on the Commonwealth Bank and its corporate governance
would be wrong. The reason is its past records that exemplify the commission’s marked failure
to bring a change. The case of the 1991 Royal Commission into Aboriginal deaths in custody
proved largely futile as the number of Aboriginal deaths in custody continued to rise. It is also
significant to note that the commission had run for more than three years and yet failed to put a
check in the number of deaths or even prisoners. This contradicts the statement that given a
longer period, the Royal Commission can produce crucial results.
Another important aspect of the inquiry is the amount of money that would go into it. It is
estimated that around 75 million of Australian dollars, the money that belong to the country’s
taxpayers, would go into the investigation. In addition to this sum, the four banks are also
predicted to drain a wealthy amount to put forward their side of the story, CBA included. It is
therefore going to put huge financial pressure on the government.

Bibliography:
Commonwealth Bank admits to failures in money-laundering case. (2018, January). The
Guardian. Retrieved from https://www.theguardian.com/australia-news/
Letts, S. (2017, December 15). CBA warned terrorist his account was about to be closed:
AUSTRAC. ABC News. Retrieved from http://www.abc.net.au/news
Corporate Governance Council. (2018, January). Asx.com.au. Retrieved 30 January 2018, from
https://www.asx.com.au/regulation/corporate-governance-council.htm
Osborne, P. (2018, January 22). Banking royal commission to get under way. NewsComAu.
Retrieved from http://www.news.com.au/