Two of Australia’s largest banks vowed to toughen oversight of their foreign-exchange practices and each pay A$3 million ($2.3 million) to the nation’s financial literacy fund after a regulator found inappropriate conduct in their currency trading divisions.
Westpac Banking Corp. and Australia & New Zealand Banking Group Ltd. said on Wednesday they entered into so-called enforceable undertakings with the Australian Securities & Investments Commission to make changes to their foreign-exchange systems, controls and supervision. An enforceable undertaking is an Australian legal device that is sometimes used as an alternative to civil action by the
The settlement means Australia’s four biggest banks have now been sanctioned as part of an industrywide investigation into oversight failings in their foreign exchange divisions. Commonwealth Bank of Australia and National Australia Bank Ltd. in December undertook similar undertakings and each contributed A$2.5 million to the financial literacy fund for similar breaches.
Separately, ANZ, Westpac and National Australia are defending accusations that some of their employees manipulated the country’s benchmark swap rate. Court hearingsare slated for September.
Wednesday’s agreements arose from an investigation of incidents between January 2008 and June 2013 in which the banks “failed to ensure that their systems and controls were adequate to address risks relating to instances of inappropriate conduct identified by ASIC,” the regulator said in a statement on its website.
ANZ Bank accepted that aspects of its supervision and monitoring of the spot foreign-exchange business at the time of the probe were “not good enough,” Chief Risk Officer Nigel Williams said in a statement.
Westpac continues to enhance its “policies and controls” for spot foreign exchange, said Lyn Cobley, chief executive of the lender’s institutional bank.