Tag: AUSTRAC

3 July 2021

AUSTRAC (Australian Transaction Reports and Analysis Centre) is a small regulator compared to ASIC (Aust Security and Investment Corporation) and APRA (Aust Prudential Regulatory Authority).  But when Paul Jevtovic  was transferred from the AFP (Aust Federal Police) to run  it, it charged the Commonwealth Bank and Westpac with not reporting financial crimes adequately and fined them a total of $2billion. 

Those who us who think that unpunished crime is rampant in the big end  of town  cheered, and wondered if there was any hope that this might set a new norm; regulators might actually start enforcing regulations.  My private hope that they might move from banks to insurance companies, whose antics make the banks look like saints.  But I note that the National Bank, who seem the next cab off the rank have just got Jevtovic to come to them to help them clean up their act, and the new CEO, Nicole Rose is known for a less aggressive style.  This worries me.  Regulators with gentle styles seem to prosper in the bureaucracy, and one might be willing to bet that the National Bank may change its behaviour just in time and be hit with a much lower fine. Presumably the saving will make Jevtovic’s salary look like chicken feed.

What is needed is a Police model.  People speed and get fined. The Police expect them to speed, so have no qualms about fineing them.  It should be the same for corporati0ons. If they can make money doing something they will. That is what Milton Freedman told them to do and what their shareholders want.  If you want them to work within another framework, like an ethical one that lessens their profit, then you had better enforce that framework  or it will be empty words.  Police understand that. Generally ambitious bureaucrats choose not to understand it.

The Headline is about the Banks fighting financial crime- do they really care or is it just when AUSTRAC makes them?

We have to hope that Jevtovic’s move is not just another aspect of the new regulatory model.  

www.smh.com.au/business/banking-and-finance/dirty-money-how-the-banks-and-austrac-are-fighting-back-against-financial-crime-20210625-p5849c.html