Banks push for inquiry to ‘restore trust’

In the letter sent this morning, the chairmen and chief executives of NAB, CBA, Westpac and ANZ have asked for the establishment of an inquiry into the financial services sector.

The news comes as it became evident this week that enough National Party senators are prepared to cross the floor to vote for a bank inquiry.

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Acknowledging their past opposition to a bank inquiry, the leaders of Australia’s banks said it is in the “national interest for the political uncertainty to end”.

“It is hurting confidence in our financial system, including in offshore markets, and has diminished trust and respect for our sector and people. It also risks undermining the critical perception that our banks are unquestionably strong,” said the letter.

“As you know our banks have acknowledged that we have not always got it right, and have made mistakes.

“We now ask you and your government to act to ensure a properly constituted inquiry into the financial services sector is established to put an end to the uncertainty and restore trust, respect and confidence.

“In our view, a properly constituted inquiry must have several significant characteristics. It should be led by an eminent and respected ex judicial officer. Its terms of reference should be thoughtfully drafted and free from political influence.

“Its scope should be sufficient to cover the community’s concerns which include banking, insurance, superannuation and non-ADI finance providers. Further to avoid confusion and inconsistency, the inquiry must to the most practical extent replace other ongoing inquiries.

“It is vital that the terms of any inquiry consider the many reviews and inquiries that have been conducted into the banking sector in recent years; the significant government and industry-led reforms that have been and will shortly be implemented; the 44 recommendations made in the Financial System Inquiry in 2014; and the broad and positive contribution the banks make to the Australian economy and to millions of customers and shareholders.

“It is also important that any inquiry reports back in a timely manner to that we can have certainty about the findings and move forward to implement any recommendations.

“We will work hard to ensure our contribution to any process helps to further strengthen Australia’s financial services system.”