SYDNEY • Australia's prudential regulator should be given powers as soon as next month to cap bank executives' salaries, delay their bonuses and drive them out of the industry if they were guilty of wrongdoing, Treasurer Scott Morrison said yesterday.
The government is pushing ahead with tougher rules for banks after a series of scandals undermined public confidence in the sector, including alleged breaches of money-laundering laws by Commonwealth Bank of Australia.
While the Australian Bankers Association says the proposed changes are being rushed through with insufficient consultation, Mr Morrison said he was not prepared to wait. "I know the banks don't want many of the elements of this legislation but I'm not about to give them three months to make the case as to why they shouldn't be in there," Mr Morrison told the Australian Broadcasting Corporation.
"They are going in, I'm not mucking around" he said.
Australia's biggest banks have gone through a tumultuous period peppered with allegations of misleading financial advice, insurance fraud and interest-rate rigging.
The country's biggest lender by market capitalisation, Commonwealth Bank, is facing billions of dollars in fines over allegations of systemic breaches of money-laundering and terror-financing laws.
Policymakers have sought to reassure the public they are holding the banks to account, and last Friday unveiled new powers over executive pay to be handed to the Australian Prudential Regulation Authority next month.
The banking scandals have fuelled calls for a broad judicial inquiry into Australia's banking system, which could recommend greater regulation or even criminal charges.
But the Treasurer said yesterday that a so-called Royal Commission was not necessary, although it has the strong backing of the public and the opposition Labor Party.