Treasurer Josh Frydenberg said the interim report shows the culture, compliance and conduct of Australia’s banks and financial services institutions is “well below the standards” Australians expect.
“Banks and other financial institutions have put profits before people. Greed has been the motive. Short-term profits have been pursued at the expense of basic standards of honesty,” Mr Frydenberg said.
“Almost every piece of conduct identified and criticised in this report can be connected directly to some form of monetary benefit,” he said.
In light of the spectacular findings of the royal commission – which include fee for no service, charging fees to dead people, and inappropriate loan advice with devastating consequences – questions have been raised about whether new laws or stronger regulatory enforcement is required.
“We will take whatever action is necessary to restore the public’s confidence and trust in our financial system, which is vitally important for the Australian economy,” Mr Frydenberg said.
“The consumer comes first, second and third. These financial entities have an obligation under their licences to act honestly, fairly and efficiently.”
Mr Frydenberg made a point of noting the failings of the corporate regulator, ASIC, in capturing and punishing misconduct.
“This interim report also makes clear that while behaviour was poor, misconduct when it was revealed went unpunished, or the consequences did not meet the seriousness of what has been done,” he said.
For example, earlier this month, the royal commission heard that ASIC allowed a 96 per cent penalty to CBA after it misled consumers in its marketing. Further, ASIC allowed CBA to draft a media release on the issue.
Up to now, the federal government has announced that significantly harsher penalties for misconduct – including double the current jail time – is in the works.
After today's "scathing" report was released, it seems Australian consumers can expect a significant government response to the final report, which is due out in early 2019.