The much-anticipated final report of the royal commission into misconduct in the banking, superannuation and financial services industry will have a “monumental impact” on the sector, according to researchers at the University of Sydney.
After 68 days of public hearings involving 134 witnesses and the tendering of 6,500 exhibits, the Royal Commissioner, Kenneth Hayne, a former High Court judge, will deliver his report, with the government expected to release it publicaly next Monday.
“It will no doubt have a monumental impact across the Australian financial system,” predicted Dr Eliza Wu, Associate Professor in finance at the Business School.
“Hopefully, it will also provide clear guidance on how to enhance the integrity of the financial services industry.”
While highlighting the “bad behaviour of banks”, Dr Andrew Grant from the Business School said the commission “has also focused attention on a severe lack of financial literacy among the Australian population”.
“Although Commissioner Hayne has already sought to ensure, among other things, more responsible lending in the future, it is highly important that consumers are aware of the risks of entering into any financial agreement,” Dr Grant said.
Professor Jason Harris from Sydney Law School said, “the royal commission has thrown doubt on the appropriateness of companies pursuing the goal of shareholder profit above all else.”
“The royal commission’s report should also be a strong wake up call for the corporate regulator ASIC to change its approach to enforcing the law and taking on the tough cases,” Professor Harris added.
The Business School’s Professor Clinton Free agrees: “The irony of the banking royal commission is that it may end up having its greatest impact on ASIC," he said.
“Politically, the report comes at a time when it can’t be ignored,” Professor Free continued.
“Labor are already strongly signalling a commitment to prosecuting Commissioner Hayne’s recommendations, [so] it is hard to see the government ignoring them.”
The Business School’s superannuation specialist, Professor Susan Thorp, said, “Superfund members are hoping for recommendations that will help resolve serious conflicts of interest” revealed during Commission hearings.
Dr Kym Sheehan, who is a specialist in executive remuneration at Sydney Law School, said, “Evidence before the Commission confirmed Australia's largest banks and financial service companies have often been unclear as to why they paid bonuses to executives when there was evidence of numerous failings”.