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Category: Banking / Royal Commissions / Law, Crime and Justice / Corruption / Federal Parliament / Federal Government

Banking royal commission 'more transparent than ASIC action'

Tuesday, 12 Apr 2016 22:02:00 | Caitlyn Gribbin

Chris Bowen has been pressuring the Government to call a royal commission into the banking industry. (AAP: Dan Himbrechts)

The Federal Opposition says it has evidence that a royal commission into the banking and finance sector would be more transparent than an Australian Securities and Investments Commission (ASIC) investigation.

Key points:

  • Labor pushing for formal probe into banking misconduct
  • Parliamentary Library advice says ASIC investigation would be less transparent than royal commission
  • Treasurer says ASIC has greater powers than commission

The Federal Government said "serious issues" in the banking industry needed to be addressed, but has rejected the Opposition's calls for a royal commission, saying ASIC had the same powers and could use them immediately.

But shadow treasurer Chris Bowen said analysis from the Parliamentary Library showed ASIC's investigations and questioning usually occurred behind closed doors.

"ASIC conducts its affairs in private whereas a royal commission would be a thorough and public and transparent aeration of the issues," Mr Bowen said.

"The Australian people deserve the transparency that goes with a royal commission."

Treasurer Scott Morrison has said ASIC had greater powers than a royal commission, and this week flagged potential funding increases for the regulator after it shed more than 200 jobs due to budget cuts since the Coalition came to power.

Advice provided by the Parliamentary Library, obtained by the ABC, states transparency is a "key difference" between a royal commission and an inquiry by ASIC.

"The problem with relying on an ASIC investigation alone flows from the lack of public transparency around the use of an ASIC inquiry," the Parliamentary Library advice reads.

"Only a very small proportion of matters dealt with by ASIC lead to prosecution and thus may become public.

"This is because the evidence required for criminal prosecution is necessarily a tough burden to meet."

'Undesirable' details could be kept secret during ASIC probe

A royal commission has no power to prosecute misconduct but may refer matters to other investigatory bodies.

What is a royal commission?

Bill Shorten says an incoming Labor government would hold a royal commission into misconduct in the banking industry. We look at the role of royal commissions and what would likely be involved.

The Parliamentary Library advice warns an ASIC investigation may mean "undesirable, deeply cultural" behaviour in the banking and finance sector may never be publicly revealed if criminal prosecution does not result.

The advice said a royal commission may "facilitate understanding of the nature and extent of the problem" and could contribute to proposals for legal reform.

"The litany of media stories covering a range of inappropriate conduct in different contexts within the banking sector may be grounds for arguing that a royal commission would be better suited to dealing, identifying and addressing issues of concern in the banking sector."

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