MELBOURNE (Reuters) - Australian Treasurer Josh Frydenberg wants to ensure that any action against banks in the wake of a scathing report on their misconduct does not lead to tighter lending or hurt the economy, he said in a media interview on Monday.
An independent commission last week said banks and wealth managers had pursued profit ahead of their customers’ interests and treated regulatory compliance as a cost rather than a guide to proper conduct, in an interim report following 60 days of hearings.
The commission found instances of bribery, fraud, fee-gouging and board-level deception across the financial sector. Its final recommendations are due in February.
Frydenberg said there was no excusing bad behaviour by the banks and other financial institutions.
“Basic standards of honesty and fairness went out the door as greed became the primary motive and profits were put before people, and sales of these products and services by the financial institutions became their sole focus,” he told Australian Broadcasting Corp radio.
His focus would be on ensuring such conduct was not repeated and that there was accountability for what has been uncovered, he was quoted as saying in the Australian Financial Review.
At the same time, he wanted to make sure that the steps ultimately recommended “are implemented in a manner that does not undermine consumer and business access to financial services and credit, stability of the financial system, competition or economic growth.”
Frydenberg said the Australian Securities and Investments Commission (ASIC) would need to “better enforce, be less timid, more aggressive in enforcing the law” to ensure a greater culture of compliance.
Prime Minister Scott Morrison said on Sunday he expected ASIC to take action against disgraced bankers.
Frydenberg declined to predict whether the commission may recommend jail time for any of the misconduct uncovered.
The government would extend the February deadline for a final report if the commission sought more time, he said.
Reporting by Sonali Paul; editing by Richard Pullin