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Australia banking inquiry resumes amid deluge of misconduct submissions
[SYDNEY] A powerful inquiry into the Australian banking sector resumed public hearings on Monday, with the former judge who is leading the investigation revealing he has been swamped with more than 5,500 submissions detailing misconduct.
Kenneth Hayne, who is presiding over the Royal Commission as the inquiry is known, said the deluge meant he has had to refuse many applications to appear in the third round of hearings, which will focus on lending to small and medium-sized businesses.
About 11 per cent of the 5,500-plus submissions relate to small and medium-sized business lending practices, he said.
Case studies to be presented during the two-week session are expected to include incidents where guarantors to loans lost their homes due to bad advice, according to preliminary submissions.
Hayne said that all submissions to the commission were read, but the commission would continue to focus on selected cases to investigate broader wrongdoing by the banks.
"I remain of the view that proceeding by way of case studies ... is the best way of finding out what has happened, finding out what was done or not done in response to what happened,"Hayne said at the opening of Monday's session.
Other case studies are expected to show banks providing loans without first assessing the viability of businesses, relying instead on personal guarantees and residential mortgages to back the loans, as well as loans being put in default even though business borrowers had not failed in repayments.
Alastair Welsh, head of commercial lending at Westpac Banking Corp , Australia's second largest bank, is scheduled to be the first bank executive to appear before the inquiry this week.
The country's four largest banks - C - dominate the mortgage and business lending market, while also holding the lion's share of deposits and consumer credit loans.
The two previous rounds of hearings uncovered widespread abuses by the retail and wealth management units of Australia's largest banks and financial companies, triggering the departure of many senior executives at leading wealth manager AMP Ltd as well as CBA.
Less than halfway into a year-long investigation, the commission has already prompted the banks to impose stricter lending conditions on borrowers, triggering fears the economy will be the victim of a new era of subdued credit growth as a result.