30 Nov 2017

Australia to hold major inquiry into nation's banks

1:34 pm on 30 November 2017

Australia will hold a royal commission inquiry into its banking and financial sector, its government has announced.

Prime Minister Malcolm Turnbull said the commission - Australia's highest form of public inquiry - would help restore confidence in the sector.

Australians banks have been embroiled in scandals in recent times.

The announcement came after the chiefs of Australia's four biggest banks - ANZ, Commonwealth, NAB and Westpac, signed a joint letter calling for an inquiry to end industry uncertainty.

New Zealand's top four banks are all Australian owned with Australian institutions making up about 80 percent of the banking sector.

"The only way we can give all Australians a greater degree of assurance is a royal commission into misconduct into the financial services industry," Mr Turnbull said.

He said the "regrettable but necessary" decision had come because calls for an inquiry had begun to undermine confidence in the sector, which could harm the nation's economy.

Mr Turnbull had previously ruled out an inquiry amid pressure from opposition parties.

The inquiry, covering every Australian financial institution, will run for 12 months and cost $A75m ($NZ82m), the government said.

- BBC / ABC

Get the new RNZ app

for ad-free news and current affairs