Australia's big four banks have seen their share prices slide today, with concerns a royal commission appears much more likely.
In late afternoon trading, Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) share prices were down 2.5% at $22.82, 1.3% at $71.60, 0.7% at $24.51 and 1.8% at $28.025.
With the Liberal National Party (LNP) holding 70 seats against the Labor party's 67 and 8 seats in doubt, the odds of a minority government appears likely. That could give Labor or a minor party member the ability to introduce a bill to establish a royal commission into the banks. Either that or the LNP could be forced to do a deal with a minor party to setup a royal commission into the banks and financial advice.
Prior to the election, the government had resisted calls for an enquiry into the banks from a number of sectors, including the Labor Party, the Greens and many of the minor parties in the Senate.
The push comes after a 2014 Senate committee recommended a royal commission into the Commonwealth Bank after its financial planning scandal. Then the banks' insurance arm CommInsure was embroiled in more wrongdoing with claims the bank was rejecting claims from sick and dying policyholders.
There's also the numerous undertakings agreed to by other banks around financial advice, and the Bank Bill Swap rate manipulation allegations.
According to shadow treasurer Chris Bowen, the commission would examine how widespread instances of illegal and unethical behaviour are with Australia's financial services industry. Their duty of care, if regulators are equipped to deal with breaches and any other issues that may come to light during the investigation.
The big concern is that the commission could see more regulation applied to the banks and the possibility of the banks being forced to split off their wealth management operations.
