by Mish Shedlock, Mish Talk:
Ian Narev, the CEO of Commonwealth Bank of Australia (CBA), the nation’s largest bank is set to step down amid money laundering charges.
Money laundering is big business in Australia because regulations do not cover lawyers, real estate agents, accountants, and CEOs ignoring warnings from police.
Despite the obvious problem, it’s cash itself that gets the blame.
There are several stories here buts let’s start with Australia’s Biggest Bank Says CEO Will Retire Amid Money-Laundering Scandal.
Commonwealth Bank of Australia Chief Executive Officer Ian Narev will step down by the end of June 2018 as the nation’s largest lender seeks to mitigate the fallout from a money-laundering scandal.
Pressure is building on Commonwealth Bank amid allegations by the nation’s financial crimes agency that drug syndicates used its network of deposit machines to launder cash, despite warnings from police. The nation’s securities regulator opened its own inquiry last week and the governor of the central bank called for accountability in the banking industry, which is beset by a string of scandals.
Narev, 50, has presided over a market-topping stock price since he took the helm at the start of December 2011. Last week, he delivered the lender’s eighth consecutive record profit.
His achievements have been overshadowed by the money-laundering allegations — the third major public-relations scandal he has faced as CEO. The bank has paid A$29 million ($23 million) in compensation to customers who were allegedly given poor financial advice, and has faced accusations it wrongly failed to honor insurance claims to sick clients.
The financial crime agency, Austrac, alleges that Commonwealth Bank failed to report either on time or at all suspicious transactions through its network of automated cash deposit machines totaling more than A$624 million, and it failed to monitor the activities of drug syndicates even after being alerted by police. The bank has blamed most of the breaches on a software coding error which has since been fixed.
The allegations are the latest in a series of scandals in Australia’s banking industry, ranging from giving poor advice to wealth-management customers to allegations the nation’s three other biggest banks manipulated a benchmark swap rate.
Moral of the Story
With share prices high after three scandals, the moral of the story must be CEO crimes pay. What other lesson could there possibly be?
Australia a ‘Place of Choice’ for Money Laundering
Australia’s hot property market is an attractive haven for criminals, with estimates that billions of dollars of dirty money is being laundered through residential property.
Australia’s anti-money laundering law does not cover real estate agents, lawyers and accountants, despite promises when the law was enacted in 2006 that the legislation would be widened.
ANZ’s head of financial crime, Guy Boyd, is scathing of the failure of subsequent governments to extend the legislation.
Australia’s housing market has been targeted by money launderers from countries including Papua New Guinea, Malaysia and China.
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