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During Westpac’s annual general meeting on Friday (8 December), chief executive officer Brian Hartzer and chairman Lindsay Maxsted called for the recently-announced royal commission into misconduct in the banking and financial services sectors to put an end to the “political football” being played at the expense of the banks.
The executives noted that while they believe the royal commission is “unwarranted” and “unnecessary”, they conceded that it was in the “national interest” for the major banks to help end political uncertainty surrounding the sector.
“[Banks] have been a political football for too long. That’s why we have now accepted the need for a royal commission to create certainty and confidence in our banking system,” Mr Hartzer said at the AGM.
Further, Mr Maxsted argued that recent changes made by Australia’s regulators have sufficiently scrutinised the banking sector, making a royal commission redundant. However, like Mr Hartzer, he said it hopes it will end “speculation” of “alleged misconduct”.
“Given the significant changes that have already taken place or are underway, including as a result of regulatory scrutiny and government inquiries, Westpac has consistently argued that further inquiries into the sector, including a royal commission, are unwarranted,” he said.
Mr Maxsted added: “However we, and the other major Australian banks, formed the view last week that it was in the national interest for the political uncertainty and speculation around potential commissions of inquiry to end, and for the government to establish its own properly constituted inquiry.
“In this context, it is our hope that, ultimately, the newly announced royal commission will play a role in restoring trust, respect and confidence in Australia’s already strong financial system.”
Despite this, Mr Maxsted acknowledged that “some of the criticism of the Australian banks is warranted”.
He said: “There have been times over recent years when the financial services sector has failed to meet customer expectations. As a bank, and as an industry, we also underestimated the intensity of community, regulatory and government reaction when these expectations have not been met.
“The board and management at Westpac understand we must proactively respond to these concerns and lift our standards to an even higher level – and we are.”
Mr Hartzer added that the royal commission may present the major banks with an opportunity to flaunt the sector’s recent successes.
“We are embracing the royal commission as a way to finally draw a line in the sand on calls for inquiries, and as an opportunity to tell our story, including the success of Australia’s banking system in navigating the GFC and providing vital support for Australia’s robust economy today,” he added.
The CEO went on to say that Westpac is taking appropriate measures to “fix past issues” and strengthen the quality of service delivered to customers.