Westpac must hold an extra $500 million in capital as a result of its money laundering scandal, as the banking regulator launches a sweeping investigation that could lead to fines or disqualification of senior managers.
The Australian Prudential Regulation Authority on Tuesday announced the extra capital charge, which will weigh on Westpac's returns, saying it reflected the bank's "heightened operational risk profile."Credit:APRA also said it would probe whether the bank or its top brass had breached the Banking Act or the Banking Executive Accountability Regime, known as the BEAR.
"Given the magnitude and nature of the issues alleged by AUSTRAC, APRA is aiming to ensure that fundamental deficiencies in Westpac’s risk management framework are identified and addressed and that Westpac and those responsible are held accountable as appropriate," APRA said."Westpac accepts the gravity of the issues presented by AUSTRAC.
APRA said its review into Westpac would focus on the bank's risk governance. APRA deputy chairman John Lonsdale said AUSTRAC had made "serious allegations that question the prudential standing of Australia’s second largest bank."
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