Banking executives will soon face personal fines for not proactively preventing bad practices within the instutition.Credit:Paul Rovere
The Greens won government support for the changes,which will be added to the legislation before parliament ends next week. Nick McKim,the party’s financial justice spokesman,said the legislation already included fines for institutions,but did not include fines for the executives responsible for running them.
“We’re really happy to have secured million-dollar fines for dodgy bank executives,” McKim said.
“This will send a very clear message to bank executives that if they rip off their customers,they will pay,” he said. “We think that ultimately that’s going to lead to a significant improvement in culture,and the processes and frameworks that are in place within banks to make sure that customers are not being ripped off.”
Under the changes,the existing Banking Executive Accountability Regime will be extended to all large financial service providers including insurers and superfunds,as well as banks.
Andy Schmulow,senior lecturer at the School of Law at the University of Wollongong,said the provisions were not about holding management accountable for everything that happened within an organisation,or for each transaction.
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“This is where you knew that something was going wrong and you didn’t take reasonable steps to fix it,” he said.