A spate of misconduct cases against banks and other financial organisations forms the backdrop of a high-level inquiry tasked with discovering if reforms and new powers are needed.

An Australian government inquiry is due to start scrutinising the country’s banking sector that has seen a number of scandals and misconduct cases in recent years. 

Media reports said that the Royal Commission, led by former High Court judge Kenneth Payne, is to examine banks, insurers and other financial services firms and consider whether regulators have enough power to enforce rules sufficiently and punish wrongdoers.

Hearings are due to begin in March.

As reported by this news service, the wealth management sector was recently rocked by claims that Commonwealth Bank of Australia[/tag broke anti-money laundering and terrorism financing laws. The Australian Securities and Investments Commission, meanwhile, has carried out a programme to kick crooked advisors out of the wealth management sector.

The new inquiry will examine bank profitability; a report by Bloomberg cited a background paper published late last week, showing that the commission said the country’s largest banks have posted fatter profit margins and higher return-on-equity than smaller lenders, and Australian banks are comparatively more profitable than peers in Canada, Sweden, Switzerland and the UK.

Under Australian law, which is similar to that of the UK, a Royal Commission is one of the most powerful independent judicial inquiries that can be held in Australia. It has the power to summon witnesses to produce documents or testify under oath.