There’s a weird sort of dissonance in today’s Australian Financial Review.
On the front page, CBA CEO Ian Narev argues that CBA culture is “strong”.
Meanwhile, a detailed Neil Chenoweth feature breaks down how AUSTRAC thinks CBA was regularly breaching the very well-known legal requirement to report all cash transactions above $10,000. AUSTRAC has counted 53,506 breaches, an amount which in technical banking language is known as “a truckload”. Real crooks seem to have been behind a number of these breaches, using techniques such as “cuckoo smurfing“. And six of the breaches related to customers the bank itself had identified as posing terrorism risks.
The most damning aspect of the chronology is how long it took the CBA to react once problems in its systems became clear. The AUSTRAC account suggests that after realising its errors in April 2015, CBA went on failing to report suspicious transfers until January of this year. All this screams “governance failure”.
In The CEO Magazine today I suggest that this latest issue at an already scandal-prone bank poses a challenge to the broader business community. If that community wants its own claims taken seriously, it needs to have something to say about this sort of corporate misbehaviour. In this case, as in many others, that may not be easy, because investigations and legal action tend to be drawn out. But it needs to happen. The standard you walk past is the standard you accept.
(This and other CEO Magazine columns are here; follow me on Twitter @shorewalker1.)
If the story holds out, I think the appropriate reaction to this is a much stronger one than the pussy-footing you propose and that already has to be counted as ‘courageous’ in the current political climate where corruption is the norm (‘please, dear business community, why don’t you say something! If its not too inconvenient and of course I dont really want to rock the boat so am not saying you should really do something, but it sort of seems a bit wrong so maybe you want to at least say ‘tuttut’. Your servant, etc.’).
Politicians and banks should fear their populations, not the other way around.
What would you truly want to see happen in these circumstances? Surely not a ‘tut tut’ letter from a business council?
Just pushing too hard to make money and turning a convenient blind eye. Yes, the profit motive alone is a poor signal for institutions such as banks. They should be more boring and stolid institutions that collect deposits and make loans. They do not need to be so “entrepreneurial” with a vast number of million-dollar salaries.
Yes, it’s just incredible. Not the snafu with the ‘coding error’ – I guess you’d have to have a very low opinion of their intelligence if it wasn’t – but at least from the reports, they were contacted and warned by authorities regarding numerous accounts which they even then stuffed up. Seems to me that should be the maximum $18 mil penalty for each of those.
And if that bankrupts the bank the government will own it and can then sell it off again – and then give the people access to the people’s bank.
I like that idea. 18 million fine per transgression. If that is enforced to the letter, how much would we get?
Agreed on the people’s bank too, obviously.
I don’t know how many (non-coding) violations there are. Clearly with 53,000 violations counting coding problems the bank shares just get handed to the Government for zero consideration. The Mums and Dads who own the shares won’t be too happy with that though will they ?
I don’t know how many (non-coding) violations there are. Clearly with 53,000 violations counting coding problems the bank shares just get handed to the Government for zero consideration. The Mums and Dads who own the shares won’t be too happy with that though will they ?
The Fin review today reports that “One man with a car was laundering more than $650,000 a day on a meandering route through Commonwealth Bank branches in 2015, part of $1.5 million that drug syndicates were moving through CBA accounts each day.”
Quite a ‘ I know nothing ‘story.
BTW is it true that all the problems are, unique to the CBA?
Read more:
no-one is to blame! just love it.
I figure they looked at what HSBC etc. were/remain up to, what has actually happened to them and figured it was game on. Time to join the big league.