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ESSAY WRITING SAMPLE: BANK CULTURE
Posted by: Write My Essay on: December 26, 2018

Sample by My Essay Writer

Bank Culture in Australia and Abroad

Introduction 
The banking sector has always been considered as the most vital industry for any economy to function adequately. As a key sector in economic growth, the banking industry suffice as the fulcrum on which an economy hinges its monetary activities through the collection of deposits and provision of credits to the state, businesses, individuals, and households.[1] Across economic systems, banks play a pivotal role in planning as well as in the implementation of financial policy to enhance monetary flow.[2] Thus, banks are vital economic building blocks to investors and as a system, banks acts as the control apparatus for building business networks while enhancing capital flows. Capital management enhances the capacity of banks to financially flourish, thus raises the shareholder stock value, which reflects on the overall market economy. The banking industry in Australia is a major economic actor, which reaps heavily on assets investments such as securities and loans.

Over the years, the Australian banking industry has remained vibrant and showed resilience even when other foreign banks and financial institutions across the world stumbled. However, in spite of this steady growth, the sector continues to experience low interest rates and unswerving cash rate declines, which have driven revenue down since November 2011.[3]Consequently, the Australian banking sector has been experiencing massive rate declines that need to be addressed before it is too late. Specifically, a call to restructure the culture of the leading banks in Australia is timely and urgent. Culture is an important driver of how the financial industry conducts itself and without quick action the integrity of this important pillar in Australian society could fall into ruins. If the culture is adverse, it will lead to the ordinary citizens of Australia losing their money due to the degradation to the economy. Coincidentally, the behavior of the employees in the financial industry is deplorable when compared to the standards of other nations, such as the UK. Judging by the recent scandals reported in Australia, quick action needs to be made to provide the types of standards that will help provide integrity to the financial system. [“Write my essay for me?” Get help here.]

This was not the case a few decades ago; four decades earlier, the Australian banks were discreet, careful and mainly fastidious. The banks were mostly decentralized with the local managers wielding power. As a result, the clients trusted their banks and consulted their branches on a wide variety of areas concerning their investment plans. Unlike previously, today the banking system in Australia is lax with little regard to investor interests, thus leading to many clients withdrawing from the services rendered by the banks.[4] This scenario portends a worrying trend for both the current and prospective businesses and individuals seeking to invest in the Australian market.

Effects of a Skewed Culture in the Australian Banking Industry 
Due to a robust reporting mechanism put in place for the banks, other financial institutions, and the particular legislations under which analysts collect financial data, (ranging from the 1959 Banking Act to the 2001 Financial Sector Act), the Australian Banking Statistics is massive.[5] However, owing to a skewed banking culture, the regulatory and market pressures continue to point towards a scenario where all the Australian banks seem to be holding more capital, with systematic risks including concerns pertaining to an inclination towards the digital market. In projecting the course for the future, the Australian banks would have to think critically about the culture of their systems to assist them in generating capital growth to realize their set returns on equity targets. Due to the laxity in the entire business model informed by a weak corporate culture, the majority of the Australian banks missed earnings in the last financial year leading to a record-poor performance in the banking industry. Again for a record, profits for the banks clocked in at $4 billion, against the earlier projected figure $4.025 billion.[6]Arguably, this downturn affected shares as corporate debt on loans spurred. National Australia Bank Commonwealth Bank of Australia, Australia & New Zealand Group, and Westpac Banking Corporation have experienced massive debt charges of in billions between 2014 and 2016.[Need an essay writing service? Find help here.]

Even though the Australian banks have fared poorly due to the industry’s wanting corporate culture, still, risks could be managed in various areas. With the investors shying away from the banks, one of the major risks is the likelihood of generating large losses on loaning extended to residential property developers as well as on the weakening commercial property portfolios. Furthermore, the resource-related exposures of the Australian banks have shown poor fiscal graphs, however, these only exemplify a trivial share of the bank’s’ total exposures. Additionally, the concerns around culture equally pose a risk to the Australian banking industry generally, in the contest of international exposures which yield vulnerability in the global context. Consequently, through the fiscal years 2017-2020, economic futurists project that industry revenue would drop at an annualized rate of 1.3% in the coming five years to $159.5 billion.[7] Besides, despite the numerous cash rate cuts over the past two financial years, major Australian banks have their interest rates augmented on several mortgage and business lending ventures due to larger capital adequacy requirements. In essence, the higher requirements put forth by the banks are aimed at supporting a 0.3 percent rise in the banking industry revenue within the current fiscal year, even though further the sector anticipates cuts in cash rate.

ASIC’s Focus on Culture
Australian Securities and Investments Commission is an autonomous Australian government authority that functions as the country’s corporate regulator. ASIC is mandated to enforce and standardize corporate and financial laws to guarantee protection to the Australian investors, consumers, and creditors.[8] Established in 1998 following the Wallis Inquiry recommendations, ASIC’s influence, scope, and jurisdiction falls under an act of parliament. With the Australian banking system facing a series of threats, the country’s corporate regulator ASIC seeks to launch an onslaught on the Australia’s banking culture.[9] ASIC claims that the country’s banking culture continues to encourage misconduct including the “fleecing” of consumers. Notably, the intervention by ASIC to streamline the banking system follows a series of scandals, which has made the industry to lose colossal cash of unimaginable worth. New research shows that the banking sector suffers a poor risk culture in its financial institutions, thus allowing misconduct and deceitful tendencies to thrive and flourish in the system.[10]ASIC’s input in this scenario is overriding given that the country’s banking sector did not undergo a rigorous scrutiny as was the case with other sectors following the 2008 financial crash. This was mainly due to the fact that Australia never experienced the recession. However, in the new wake of cultural meltdown, concerns continue to arise as scandal endlessly pop across the nation’s financial institutions.
Currently, ASIC is investigating a widespread manipulation of Australia’s interbank borrowing rates, which has greatly made investors to lose massively. Mainly employee souring misconduct is alarming with entirely everyone employed by the banks involved in clandestine activities. So far the regulatory authority considers settlement for “prospective misconduct” from the financial institutions that have made positive crackdowns in their ranks.[11] Other financial institutions such as the ANZ Bank have been stopped from operating in the market while the investigations are underway. According to Mr. Medcraft, the regulatory authority’s chairman, ASIC seeks to intensify its pursuit of the banking institutions through criminal sanctions to bring individuals to book when they breach the laws. At the top of its priority listing, ASIC considers an overhaul of the banking sector’s culture to ensure that individuals and not companies under whom they work are to blame.[12] Furthermore, the regulatory authority also seeks the prerogatives to levy even tougher legal sanctions in cases involving fraud and misconduct.[Click Essay Writer to order your essay]

Conclusion 
Despite a weakening corporate culture in the Australian banking industry, the country’s financial system remains in perfect condition overall. Coincidentally, the profitability of the banks is at a great level while the performance of the industry’s assets continues to improve steadily. While the industry experiences negative effects from a wanting culture across banks, the robustness in the country’s financial system is driven by the financial institution’s business loan portfolio. The collapse of ethics in the Australian banking sector emanates from a broad collection of issues, which continue to trivialize the industry. For a record, the Australian banking sector has lately experienced an acute weakening in its corporate culture. While the employees of Australian banks are bountiful and are graduates of commerce and finance, the employers have not done much to impart the necessary professional codes of ethics to guarantee effective service delivery. This has changed the culture of banks from being old bankers who viewed the people as being at the core of business. Today, quantitatively educated bankers view society as an occasion to make earnings for themselves and the banks for which they work. Moreover, there is a change in how bankers are remunerated. In the past, remuneration was through salary, but today remuneration is mainly done through yearly bonuses and commissions. Therefore, banks in Australia have shifted from being in an industry that was conceived to help people make and save money into being an industry that took advantage of people. This changed the banks from being a service industry to being a profit-only conscious industry whose primary aim is to make limitless profits. Banks have changed from being a supplier of capital that industries needed for production to being pursuers of profit resulting from an undesirable culture among its employees whose goal is commissions and bonuses. Cultural change is therefore needed in all Australian banks. At the top ASIC’s key priorities stands the need and urgency to promote investor confidence and financial consumer trust. For any financial institution to function optimally, trust and confidence are critical for growth and competitiveness. Poor corporate culture has the capacity to undermine both trust and confidence, thus driving away investors. By contrast, shrewd corporate culture that advocates a more conducive business environment and shapes good conduct within the system, helps in maintain investor confidence and trust. ASIC’s new momentum is to integrate cultural welfares into its risk-centered surveillance to better comprehend how market friendly cultures can drive industries into greatness. Over time, ASIC has achieved greatly by incorporating numerous specific features of culture within its surveillances, through breach reporting, remuneration, and complaints control. Currently the regulatory is undertaking appraisal of approaches through which it would conduct risk assessments, inject sound remuneration strategies into the system, enhance the management of confidential data, and address conflicts of interest within the industry. More profoundly, ASIC aims at establishing a thorough risk management and supervisory frameworks to guarantee investor confidence through refined corporate culture. ASIC maintains that it would consider the nature of conflicts of interest in the banking industry, how they are managed within and across systems to generate financial advice, conduct research, and to establish corporate advisory to enhance corporate aptitude.

Bibliography
Australian Securities & Investments Commission, ‘ASIC’s focus on culture – digging into the detail.

Australian Securities & Investments Commission, Why culture matters.
Colvin, John and James Argent, ‘Corporate and Personal Liability for Culture in Corporations?’ (2016) 30 Company and Securities Law Journal. 30.

David Wishart, Marilyn McMahon, and Ann Wardrop, ‘Regulating Financial Institution Culture: Reforming the Regulatory Toolkit’ (2016) 27 Journal of Banking and Finance Law and Practice171.

Eilís Ferran, Niamh Moloney, Jennifer Hill, and John Coffee. International Corporate Law and Financial

Market Regulation. England, UK: Cambridge University Press, 2012.

Greg Medcraft, ‘Why Culture Matters’ (Speech delivered at the BNP Paribas Conduct Month Sydney, Australia, 24 May 2016) .

Jamie Smyth, Australia launches crackdown on ‘fleecing’ bank culture. Financial Times. 2015.

PricewaterhouseCoopers, ‘Major Banks Analysis May 2016.’

Rajaretnam, Thilla and Angus Young, ‘In the Best Interest of Clients? A Reappraisal of the Recent Reforms in the Regulation of Financial Advisers in Australia’ (2015) 26 International Company and Commercial Law Review, 39

Street Authority, ‘Is Australia’s Banking Industry Going Under?”


[1]. Eilís Ferran, Niamh Moloney, Jennifer Hill, and John Coffee. International Corporate Law and Financial Market Regulation. England, UK: Cambridge University Press, 2012.
[2]. Thilla Rajaretnam and Angus Young, ‘In the Best Interest of Clients? A Reappraisal of the Recent Reforms in the Regulation of Financial Advisers in Australia’ (2015) 26 International Company and Commercial Law Review, 39.
[3]. John Colvin, and James Argent, ‘Corporate and Personal Liability for Culture in Corporations?’ (2016) 30 Company and Securities Law Journal, 30.
[4]. PricewaterhouseCoopers, ‘Major Banks Analysis May 2016.’
[6]. PricewaterhouseCoopers, ‘Major Banks Analysis May 2016.’
[7]. PricewaterhouseCoopers, ‘Major Banks Analysis May 2016.’
[8]. Greg Medcraft, ‘Why Culture Matters’ (Speech delivered at the BNP Paribas Conduct Month Sydney, Australia, 24 May 2016)
[9]. Australian Securities & Investments Commission, Why culture matters.
[10] . Jamie Smyth, Australia launches crackdown on ‘fleecing’ bank culture, Financial Times. 2015
[11]. David Wishart, Marilyn McMahon, and Ann Wardrop, ‘Regulating Financial Institution Culture: Reforming the Regulatory Toolkit’ (2016) 27 Journal of Banking and Finance Law and Practice 171.
[12]. Australian Securities & Investments Commission, ‘ASIC’s focus on culture – digging into the detail.

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