The federal government’s adoption of ASIC chair James Shipton’s proposal to embed ASIC supervisors in the banks is an important initiative. The Global Financial Crisis and the procession of corporate and financial scandals since then have led to what Shipton calls a “trust deficit”. The move to embed regulators in banks aims to drive to drive much-needed cultural change and rebuild lost trust.
The scandals and further evidence of misconduct uncovered at the Hayne Royal Commission have turned the spotlight on the failures of senior executives, corporations and also regulators to combat white-collar crime. Increasingly, commentators identify “defective” culture as a prominent cause of corporate and financial misconduct. Certainly, ASIC identifies corporate culture as being “a key driver of conduct”.
That is the reasoning behind embedding ASIC supervisors in banks. But such action is not without its risks and problems.
TC Beirne School of Law's Dr Vicky Comino writes for The Conversation.
Read Dr Comino's related article, Restructuring alone won't clean up the banks' act.
