It is difficult to ignore the widespread concern over the corporate culture of Australia's banking industry. This growing concern has led to close scrutiny of banks and subsequently triggered the Australian Securities and Investments Commission (ASIC) to regulate what it deems as bad corporate culture.
The resulting independent initiatives of the Australian Bankers Association (ABA) Code of Conduct reviews and recommendations have attempted to address the issue. The July 2017 Federal Treasury’s consultation paper is currently seeking to introduce a Banking Executive Accountability Regime (BEAR) providing Australian Prudential Regulatory Authority (APRA) with powers to enforce a new regulatory regime. The August 2017 Commonwealth Bank of Australia (CBA) allegation of multi-million dollar money-laundry activity through intelligent bank deposit machines has sounded more alarm bells in relation to the alleged lack of cultural risk.
Under the BEAR proposed regime, Australia's bank executives would be required to take responsibility for their corporate culture. This is an attempt to restore the trust and integrity lost due to a number of financial organisations behaving inappropriately.1 It has been suggested that the erosion of trust in finance forces renewed reflection on how to mediate the relationship between state and market and the role to be played by the corporation.2 Kingsford-Smith, Clarke and Rogers observes:
‘[W]hilst lately more attention is being given to responsible persons or managers, the calibre of personnel, and 'risk culture' in regulatory standards, it is still mainly seen as an entity requirement to have proper capabilities and resources, not a question of individual ethical or legal responsibility. This concentration on entity regulation is one of the myriad structural features that act as obstacles to professionalism in banking.'3