Australia: Regulator given powers over bank bosses’ pay

According to Reuters, Australia has given its financial regulator powers to cap bank bosses’ pays. These powers include delaying their bonuses and even banning them from the industry if found guilty of non-compliance.

Plans were first announced in May, 2017, as a result of the immense pressure on the government to rein in a sector that in recent years has faced accusations of withholding legitimate health insurance payouts, giving misleading financial advice and rigging interest rates.

The series of scandals has cost Australian banks, among the most profitable in the world, hundreds of millions of dollars in fines and triggered a royal commission—an inquiry with the power to recommend criminal charges that starts next week.

Under the new law passed by the Senate on Wednesday, February 7, banks in Australia, the world’s number 12 economy, must do business with “honesty and integrity” and their senior executives will be held directly accountable for non-compliance.

“This legislation is part of a broader suite of financial services reforms … to put consumers first, ensuring Australians can have trust and confidence in the banking system,” Treasurer Scott Morrison said in an emailed statement.

Full Content: Reuters

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