Opposition Leader Bill Shorten said on Friday a Labor government would hold a royal commission into bad behaviour in the financial services industry.
The decision had been given the green light by the shadow cabinet and was not “made lightly”, Mr Shorten said.
“Retirees who have lost their retirement savings, small businesses who have lost their livelihood, Australian families who have lost hundreds of thousands of dollars, life insurance beneficiaries denied justice and legitimate claims,” he said.
“There are literally tens of thousands of victims, if not more. And today I say enough is enough. This string of scandals has to stop.”
The Australian Bankers' Association (ABA) was quick to reject the proposed royal commission into the banking sector, saying it would be “unnecessary and a waste of taxpayer funds”.
The association's chief executive Steven Munchenberg said banks accepted that they have not always lived up to their own standards, but new regulations and government inquiries have “already examined" the issues.
“The outcomes of those inquiries are either being implemented or, like the former government’s Future of Financial Advice reforms, are still taking full effect,” Mr Munchenberg said.
“These measures respond to instances that occurred in the past and should be given a chance to take full effect before another inquiry is contemplated.”
The ABA boss said Labor's proposed royal commission would have “international ramifications” for Australia.
“Banks are particularly concerned that a call for a royal commission will send alarm signals to international investors about Australia at a time of global volatility,” he said.
Meanwhile, Industry Super Australia (ISA) released a statement on Friday, saying that a royal commission into Australia's “vertically integrated banks” was justified.
“Industry Super Australia is increasingly concerned that the lack of community trust and confidence in the scandal-prone banks could infect public confidence in their lines of business in compulsory super,” the industry fund lobby group said.
“Over recent weeks, months and years, Australia’s major banks have faced repeated allegations and evidence of wrongdoing that has reduced public confidence in banking and finance.
“Despite this, we have seen the banks consistently seek to design policy to suit their vertically integrated business models, typically at the expense of the Australian public.”
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