The top brass of Australia's banking sector will have their turn in the Hayne royal commission witness box over the next fortnight, to be grilled over the run of scandals and the commision's interim report, which blasted the industry as being driven by greed.
After a year of damning revelations of misbehaviour by banks, wealth managers, and insurance companies, chief executives and some chairmen have been summonsed for the final round of public hearings, which commence on Monday in Sydney before commissioner Kenneth Hayne, a former High Court judge.
Commonwealth Bank, Westpac, Macquarie Group and the corporate regulator will be questioned by the commission's senior counsel this week, as the powerful inquiry turns its attention to the root causes of misconduct, and what might be done to stamp it out.
CBA, the country's largest and most scandal-prone bank in recent years, will be the first lender put under the spotlight, with chief executive Matt Comyn to appear on Monday, followed by chairman Catherine Livingstone.
In preparation for the upcoming grilling of the bankers, the royal commission has demanded detailed documents from banks on a wide range of issues, including remuneration, internal policies and governance arrangements.
Shaw and Partners analyst Brett Le Mesurier said the bank CEOs and chairs would need to demonstrate the banks had thoroughly looked into how scandals occurred, and the underlying problems were being addressed.
"They will have to come up with a reasonable case as to how these things happened under their watch," Mr Le Mesurier said.
Westpac chief executive Brian Hartzer will take to the stand for the country's second largest bank after CBA's turn, while Macquarie Group chief Nicholas Moore will also appear - the first public scrutiny of Macquarie by the Hayne commission.
Joining the banking executives during the Sydney round will be Australian Securities and Investments Commission (ASIC) chairman James Shipton. Commissioner Hayne's interim report slammed ASIC for being too reluctant to take banks to court, and too willing to compromise.
The royal commission has contributed to billions being wiped off financial instutions' share prices this year, but Bell Potter analyst TS Lim said he thought most of the banks' "dirty laundry" had been aired by now.
Mr Lim said he thought that rather than unearthing new scandals, this round of hearings would be focused on the steps banks had taken to stop future misconduct, and the consequences for responsible managers or staff.
"Hayne is going to be more like a school master telling them off," Mr Lim said.
Next week in Melbourne, NAB chief executive Andrew Thorburn is set to take to the witness box and is expected to face questions over issues including the bank's charging of fees for financial advice that was never provided. NAB also confirmed last week a number of unintended breaches of the company's policies relating to gifts by Mr Thorburn.
NAB chairman and former Treasury Secretary Ken Henry is also set to front the inquiry, and could be questioned over the policy impacts of possible changes to financial regulation.
ANZ chief executive Shayne Elliott, Australian Prudential Regulatory Authority chairman Wayne Byres, and AMP acting chief executive Mike Wilkins are also expected to appear next week.
Commissioner Hayne's interim report did not make recommendations, but it identified banks' practices of linking remuneration to profitability as a fundamental concern, while also questioning whether banks did enough to look into customers' living expenses when lending money.This article was first published by https://www.brisbanetimes.com.au
Author: Clancy Yeates & Sarah Danckert