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Banks and the broader financial services sector face drastic reforms to prevent their reprehensible behavior for profit reasons from reoccurring.
The sector is preparing for a scathing final report from Royal Commissioner Kenneth Hayne, QC, which will be released after the stock market closes on Monday.
After already condemning the industry's greed and criticizing the lenient regulators for allowing the faults to go unpunished, Hayne will recommend substantial changes in the banking, pension and financial services sectors .
The report will focus on ensuring that money is loaned responsibly to consumers, problem solving, regulation and compensation for all, from senior bank officials to agency employees, brokers and advisors. financial.
Banks have already tightened lending standards in response to the one-year investigation and previous regulatory actions, but the final report is expected to result in further restrictions on the availability of the bank. credit.
Hayne's more rigorous interpretation of responsible lending standards will require banks to do more to verify clients' income and their actual living expenses, rather than relying on baseline spending measures.
Mr. Hayne made it clear that he wanted the financial services laws to be respected and enforced by powerful regulators, rather than adding many new laws to an already complex regulatory regime.
Anna Bligh, CEO of the Australian Banking Association, said the banks had already made a number of changes, but that there was still a lot to be done.
It is unclear whether Mr. Hayne will recommend civil or criminal prosecution for specific flaws reviewed at the public hearings, as regulators are already reviewing the cases.
Australian Associated Press
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