The Australian Prudential Regulation Authority has slammed the Commonwealth Bank over events leading to allegations that it broke anti-money laundering and counter terrorism financing laws on almost 54,000 occasions.
In its final report into governance, accountability and culture at the CBA, APRA said the bank’s “continued financial success dulled the senses of the institution”.
The report found the CBA had a “widespread sense of complacency, a reactive stance in dealing with risks, being insular and not learning from experience and mistakes.”
APRA also pointed to an “overly-collegial and collaborative working environment” which lessened the opportunity for constructive criticism.
Responding to APRA’s report, the CBA has acknowledged the regulator’s concerns and has offered an enforceable undertaking in response to the report.
In what will be criticised as a slap on the wrist rather than a penalty, APRA will also add $1 billion to the CBA’s minimum capital requirement.
The APRA inquiry was launched on August 28 after the Commonwealth Bank was accused by the financial intelligence agency of breaching anti money laundering and counter terrorism financing laws on 53,700 occasions.
The APRA panel was chaired by former APRA chairman John Laker, who examined CBA’s culture with former ACCC chairman Graeme Samuel and company director Jillian Broadbent.
The Commonwealth Bank is briefing investors later this morning.
Follow Peter Ryan on Twitter @peter_f_ryan.