In recent comments to the media, John Lonsdale, Chair of the Australian Prudential Regulation Authority (APRA), made clear that the regulator expects ANZ's board to consider bonus reductions for senior executives following a high-profile bond trading scandal and widely reported cultural deficiencies.
APRA recently imposed an additional $250 million risk capital penalty on ANZ due to ongoing concerns about its risk management, bringing the bank's total operational risk capital addon to $750 million. As a part of that action, APRA ordered an independent review of the root causes of cultural issues within ANZ's market business, mandating that the bank create a remediation plan with the findings of that review. Lonsdale emphasized APRA's focus on the non-financial risks stemming from culture and operations, which can materially affect a bank's financial stability and reputation.
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