South Australian senator Nick Xenophon has called for jail time for big bank bosses seen to be crossing the line of the law.
The outspoken senator made the comments following the surfacing of allegations against the Commonwealth Bank of Australia of money laundering and failing to comply with counter terrorism financing laws.
The federal government’s financial intelligence unit AUSTRAC has discovered some 53,000 breaches by the bank and is currently pursuing civil investigation.
However, Xenophon says this is not enough.
“There has been an almost contemptuous disregard of the law, and if the consequence of that is to allow drug dealers to launder money and terrorist operations to be funded by this, then that’s very serious,” he told reporters at a doorstop in Canberra on Sunday.
“If you want to have a cultural shift in financial institutions that are doing the wrong thing, there is nothing like a jail term for their chief executive and board of directors to sharpen their thinking.”
“Sometimes a jail term needs to be on the agenda.”
The senator described current plans to hit the CBA with a massive fine as akin to being “slapped in the face with a piece of wet lettuce”, and suggested harsher penalties needed to be brought.
“If you’re fair dinkum about changing the culture of an organisation, sometimes the spectre of a jail term might sharpen their thinking.”
CBA is under fire for failing to report millions of dollars of cash transactions. Xenophon believes this should be enough to prompt criminal charges.
“We need to change the law to ensure senior bank executives and the directors of a bank could face criminal penalties and jail if they are shown to be reckless in the way they have dealt with issues of money laundering,” he said.
The South Australian senator has renewed his calls for a Royal Commission into banking.