SYDNEY – The Australian Government announced the establishment of a royal commission on Thursday, tasked to investigate misconduct by the country’s major banks and other financial institutions in order to restore public confidence.
Prime Minister Malcolm Turnbull and Treasurer Scott Morrison said in a joint statement that all Australians have the right to be treated with fairness in their dealings with financial institutions.
The measure was announced Thursday after months of pressure from the opposition Labor Party and the Green Party. Some officials from the ruling party also voiced their support, although the prime minister himself initially opposed the decision.
“We have got to stop the banks and our financial services sector being used as a political football,” Turnbull said as he announced the measure in front of journalists in Canberra, adding that “the only way we can give all Australians a greater degree of assurance is a royal commission into misconduct in the financial services industry. “
The Commission will focus on assessing the behavior of banks, insurance companies, financial service providers and managers of retirement funds, known in Australia as “superannuation,” as well as the ability of regulators to identify misconduct in the financial institutions.
The commission, which will have 12 months to complete its report after being appointed, will not investigate the financial stability of the banks, according to the statement.
The senior managers of Australia’s four largest banks, the Commonwealth Bank, ANZ, NAB and Westpac, said in a letter that although their institutions have long opposed investigation, the measure is in the national interest.
“Our banks have consistently argued the view that further inquiries into the sector, including a Royal Commission, are unwarranted,” read the joint letter, adding that, “however, it is now in the national interest for the political uncertainty to end.”