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Another banking scandal… but who’s counting?

I would pretend that I’m surprised, but I’m really not.

One of Australia’s ‘big four’ banks, Australia and New Zealand Banking Group (ASX: ANZ) this time, is in ASIC’s firing line over allegations that its traders potentially manipulated the Australian Bank Bill Swap Rate (BBSW) during a period from 2007 to 2013.

Three banks have already been fined for their role in the scheme – Royal Bank of Scotland, UBS, and BNP Paribas – while 10 other members of the 14-member BBSW panel are still under investigation.

Other banks on the panel include Macquarie Group Ltd (ASX: MQG), Commonwealth Bank of Australia (ASX: CBA), Suncorp Group Ltd (ASX: SUN), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) alongside Bank of Canada, Citigroup, Deutsche Bank, HSBC, JP Morgan, and Lloyds.

What is most telling is ANZ’s response to the investigation.

Light on plain English and rife with bank-speak, the statement from ANZ ultimately raised more questions for me than they answered.

ANZ’s chief risk officer Nigel Williams was quoted as saying: ‘We have worked hard to have the right risk culture including ongoing culture and compliance programs in our markets-facing businesses.”

The obvious hole in that statement is that perhaps non markets-facing businesses are not included in the focus on ‘right risk culture’ and compliance programs. Although it is possible they could be.

Secondly, I don’t understand why the bank made such a complicated announcement?

It would be much easier to say something like ‘ANZ does not support manipulation of any market, and individuals who do this have no place in our corporate culture’.

It may (or may not) be unfair to ANZ in this specific case, but a nagging suspicion at the back of my mind – and surely in the minds of many readers – is the thought that Australia’s big banks continue to act as they will, routinely thumbing their nose at public opinion, and corporate regulator ASIC who imposes miniscule punishments.

Just last year most Aussie banks were in trouble with ASIC for a variety of breaches, and the watchdog’s track record of prosecuting offenders unfortunately leaves a lot to be desired.

Australlian banks are in hot water again this year over conflicted fee structures to their financial advisers and the usual raft of breaches.

It’s not a stellar record and the banking industry’s history of keeping ‘house-of-cards’ style financial schemes at closer than arms length – think Storm Financial, among others – has done a good job of shattering the public’s trust in these institutions.

Recent lobbying for watered down financial reforms hasn’t done any favours to the finance industry’s public image either.

Thankfully saner heads prevailed in the Senate, and the government’s watered down financial reforms have been canned which will hopefully lead to full acceptance of the proposed Future of Financial Advice (FoFA) bill.

Ultimately, the point of all this is that the only person you can trust with your wealth is yourself – or perhaps a truly independent financial planner qualified to offer advice on your situation, and whom you pay up front for their services.

These can be found at the Financial Planners Association of Australia website.

Even if you do get independent advice, your financial future is still in your hands....

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Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.

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