BEAR not about bank bashing
The new Banking Executive Accountability Regime (BEAR) is not about bashing banks but about transparency, responsibility, and consequences, according to Federal Treasurer Scott Morrison.
In an address at the Financial Services Council’s (FSC’s) and BT’s breakfast event on Monday, Morrison said the BEAR was about ensuring the leadership of Australian banks were held to account for the decisions that could negatively impact their customers, or hurt the reputation of their bank.
Morrison said the Government’s agenda was governed by the three key perspectives of:
- Ensuring our financial system is unquestionably strong to protect against the storms that may arise;
- Ensuring our financial system is unquestionably accountable; to protect against rogue operators and rash decisions that undermine the sector and hurt the customer; and
- Ensuring our financial system is unquestionably competitive. You exist because of the customer. When they are not front and centre, you've lost your compass.
He said the accountability statements provided by banks under the BEAR regime would show who was accountable for what within the senior ranks of the bank so that banks would not be able to shift blame or claim that no one executive was responsible.
Morrison said bank executives and senior leaders would have to wear the consequences of behaviour that contradicted the standards of honesty, integrity, due skill, care, and diligence.
“For banks that breach their obligations, we're introducing civil penalties of up to $210 million – a strong deterrence for poor behaviour. But this goes beyond banks being forced to write big cheques to absolve their sins,” he said.
“Executives and directors in breach of their obligations face disqualification from the banking industry and they may be stripped of their bonuses.
“This is legislation with teeth. And such is necessary to restore the public's faith in the leadership of our banks and the way they go about their business. It is not about bashing the banks.”
Morrison said the legislation had been formed through consultation with banks and their chief executives, and that executives and directors who wished to challenge their disqualification would have access to both judicial review by the courts and merits review by the Administrative Appeals Tribunal.
“We will not measure success in enforcement actions alone — the ultimate goal is to end inappropriate behaviour. The onus is on the banks to ensure the regime drives improvements in culture and behaviour rather than becoming a compliance exercise or an enforcement regime,” he said.
“Within the realm of financial advice, we are putting in the necessary guard rails to improve the professional, ethical and education standards of advisers.”
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
