Australian Treasurer Josh Frydenberg has delivered the Government's response to the banking royal commission's final report.
He said "the banking sector must change, and change forever".
Frydenberg said the Government was committed to making banks responsible. It will take action on all 76 recommendations and will seek to hold those who abuse the community's trust to account.
He said the restoration of trust in the financial system and delivering better consumer outcomes were the Government's key priorities, along with maintaining the flow of credit.
He said the royal commission advanced the interests of consumers in four key areas, including enhancing the effectiveness of regulators and raising accountability standards.
Frydenberg said the Government would introduce the following changes;
- Brokers will be banned from trailing commissions and volume bonuses
- Grandfathering of conflicted remuneration will end on 1 January 2021
- Hawking of superannuation and insurance products will be prohibited
- Agricultural loans will be subject to a range of new regulations aimed at helping farmers keep their land
- Financial advisers will be subject to new accountability measures
- A new 3-person oversight body will be established to oversee ASIC and APRA
- Regulators will be subject to capability reviews every three years. Graeme Samuel AC will lead the first review, which will begin soon
- The Federal Court's jurisdiction will be expanded to cover corporate misconduct
- A compensation scheme of last resort will be established
Frydenberg said the royal commission did not call in to question the strength of the system, but shone a light on misconduct that could be tolerated. He said he had full confidence in ASIC's ability to clean up the industry.