The Australian government will hold a wide-ranging inquiry into the country's banking sector, reversing its long-held opposition to the potentially embarrassing measure as political pressure mounts. Laura Frykberg reports.
A sector under scrutiny. Australia's government has announced its holding a wide-ranging inquiry, into the scandal-hit financial industry. (SOUNDBITE) (English) AUSTRALIAN PRIME MINISTER, MALCOLM TURNBULL SAYING: "The only way we can give all Australians a greater degree of assurance about the financial system is through a royal commission into misconduct into the financial services industry." The year-long investigation will not only pour over banking conduct, but also that of pension funds, insurers and other financial services firms. It'll have the power to compel witnesses and even recommend criminal charges. Although some are sceptical that'll happen. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "I think remarkably little will come out of the inquiry. What is interesting is the inquiry deals far more with the broader Australian financial community rather than just the banks. I think that the appetite is to renew confidence in the Australian financial system. " And it needs it. Some in the industry have been accused of misleading financial advice, avoiding life insurance payouts, rate rigging and failing to follow anti-money laundering protocols. Most notably, Commonwealth Bank of Australia, alleged to have enabled more than 50,000 payments of criminal proceeds. (SOUNDBITE) (English) AUSTRALIAN PRIME MINISTER, MALCOLM TURNBULL SAYING: "Australians deserve and expect the highest levels of service and accountability and for the vast majority, that's exactly what they receive. Since the financial crisis however, there have been examples of misconduct by financial institutions, some of them extremely serious." Investors, taking it extremely seriously too. Shares in Commonwealth Bank of Australia lost 1.9 percent on the news, while AnZ and Macquarie Group went down 1 and 1.5.