We welcome the opportunity to provide comments in relation to the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2017 (the Bill).
We support the Banking Executive Accountability Regime (BEAR) reforms, as it is clear the community expects banking executives to be held accountable for major scandals. We believe it is imperative that a better culture of personal accountability is instilled at the very top of banks.
We are particularly supportive of the Australian Prudential Regulation Authority (APRA) having oversight of accountable persons’ remuneration. We have outlined in previous submissions how remuneration can lead to poor consumer outcomes by encouraging bank staff to prioritise their commissions and bonuses over the interests of customers. This has also been acknowledged by the Australian Securities and Investments Commission (ASIC), for example, in its recent review of mortgage broker remuneration.
While we support the BEAR reforms, we believe improvements could be made to the Bill to ensure that the accountability regime better links executive remuneration and any penalties to widespread consumer harm.171101-BEAR-submission-FINAL-1