The Australian financial services industry has been reeling this year from a series of scandals brought out by that country’s Royal Commission on banking abuses. Through a series of very public hearings, top executives leaders at Australia’s most prestigious institutions have faced intense grilling.
As journalist Emily Cadman points out in this excellent Bloomberg article, Australia bank leaders were largely caught unawares by the scope of the problem that had developed under their noses. Having emerged from the Great Financial Crisis of 2008 relatively unscathed, those executives were lured into a sense of complacency regarding their exposure to non-financial risk. As Cadman points out, when the full extent of misconduct became clear, the public reaction was ferocious and shows little sign of ebbing.
While Australian banks are feeling the heat now, they are hardly alone. From Wells Fargo to London banks caught up in the LIBOR scandal, culture and conduct risk is extremely difficult to diagnose and manage. It is, in fact, the cultural norms that employees consider to be ‘standard practice’ that often provide an environment where misconduct is able to flourish.
Read the full article: The Dirty Banks Down Under