ASIC crackdown on banking misconduct by installing permanent cops

The corporate watchdog will put cops on the beat in the big four banks and AMP, to clamp down on misconduct.

The Federal Government is providing the Australian Securities and Investments Commission with an extra $70 million, to beef up its policing powers.

It comes along with tough new penalties, including the power to strip financial institutions of up to 10 percent of turn over.

Treasurer, Scott Morrison, said ASIC would be “walking soft, carrying a big stick,” providing the watchdog with a “new way of doing things”.

“This is about having someone who’s part of the process,” Mr Morrison said.

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“Tougher powers, bigger penalties and resources to get in there and make sure they’re doing the right thing.

“These are practical steps to keep everybody inside the lines.”

The additional funding came after a request from new ASIC chair, James Shipton, and a lengthy review .

“He wants to make sure he has the power and the ability to prevent misconduct before it occurs,” Financial Services Minister, Kelly O’Dwyer, said.

The embedded cops would be on the front foot, able to step in, when they see offences occurring, she said.

Mr Morrison said they’d have the ability to move from the boardrooms, to suburban branches.

Whistleblowers who call out unlawful and unethical behaviour will be given added protection.

Mr Shipton said ASIC would have 20 officers, who could spend up to months in the financial institutions.

“They will be engaging at every single point in a financial institution,” Mr Shipton said.

“We will be going on site,” he said. “We will now have more physical presence.

“We will have supervisory officers embedded for a significant period of time inside these large institutions because I know it makes a difference to the way that they behave.

“I know it will make real positive outcomes when it comes to the way financial institutions target customers. And that should be fair.

Mr Morrison said the eyes and ears in the offices, would be pro-active.

The best cops are the ones that prevent crimes from happening in the first place,” he said.