The Australian Financial Commission is investigating whether some of the biggest banks in Australia have broken the rules of the prudential rules.
In its latest annual report on financial stability, the ACCC said it was investigating whether certain banks and credit unions have been breaching the prudence requirements of the Financial Services Compensation Scheme.
The ACCC is currently investigating whether banks have been misleading customers about the riskiness of their financial products, or failing to monitor risks that might lead to the loss of a customer’s life.
The agency is also investigating whether the banks have failed to act on the information they received from customers.
It said it is looking at whether certain customers have been incorrectly denied access to financial services due to a financial institution’s lack of knowledge about their particular needs.
Banks and credit union representatives have told the ACCc they have been in contact with customers and they are committed to complying with the requirements.
“Our investigation will continue to identify those who have been breached,” ACCC chair Rod Sims said.
He said the ACC was looking at the adequacy of the current regulatory framework and the need for further changes to be made.
“The ACCC will continue its investigation into the ACC’s concerns and will make recommendations to Parliament,” Mr Sims said in a statement.
“If these changes are made, the impact on the financial system will be minimal.”
What are the prudentially important financial services?
There are two major types of financial services, which are known as commercial and investment banking.
Commercial banking involves lending money, often through credit cards or other forms of financial institutions.
The financial institutions have to ensure they are not doing things like misleading customers or taking money out of the accounts of customers with no account.
Investment banking is where investors make investments in commercial and non-commercial businesses, such as property, manufacturing or other goods and services.
The term “investment banking” also includes broker-dealers who are licensed to trade in financial instruments such as stocks, bonds, derivatives and other commodities.
The Financial Services Commission is a quasi-judicial body.
It makes decisions about whether a financial service or an institution meets the requirements for the prudentials under the Financial Conduct Authority (FCA).
The ACCc has been investigating the way commercial banks and other financial institutions deal with the risks of financial instability, since it started its investigation in 2015.
It has also been investigating whether credit unions and financial institutions are not being fully transparent about their risks and that they do not take appropriate action when they do.