NAB and ANZ have had enforceable undertakings accepted by ASIC after the Federal Court found the banks failed to meet “the most basic standards of honesty, fairness and commercial decency” in the BBSW market.
NAB and ANZ have entered into enforceable undertakings (EUs) with ASIC after the Federal Court accepted $50 million settlements with both banks earlier this month.
Under the terms of the EUs, the banks will permit an independent expert to oversee a compliance program that will "prevent, detect and respond" to any future attempts to manipulate the BBSW.
The scathing judgement of Justice Jayne Jagot laid bare the poor conduct of the banks, which she said involved "gross departures from basic standards of commercial decency, honesty and fairness".
Justice Jagot said it was "difficult the convey the seriousness of what the attempts [to manipulate the BBSW] involved".
"That any employee performing these kinds of functions within a bank, let alone two pillars of Australia’s banking system, could have conceived of manipulating the BBSW, and in fact attempted to do so repeatedly over such periods of time bespeaks fundamental failings in the culture, training, governance and regulatory systems of both NAB and ANZ," Justice Jagot said.
"The public should be shocked, dismayed and indeed disgusted that conduct of this kind could have occurred.
"The conduct involved attempts to corrupt a fundamental component of the entire Australian financial system for mere short-term commercial advantage.
"The conduct involved a repeated failure to fulfil what would generally be perceived as the most basic standards of honesty, fairness and commercial decency, let alone the standards that would properly be expected of these two banks.
"The conduct tends to undermine public confidence in the entirety of the Australian financial system."