Just 24 hours after the announcement of a new CEO, when we were assured that CBA were well on the way to addressing their known issues; ASIC lobbed a bombshell in the shape of the BBSW case.
CBA said today:
Commonwealth Bank has fully co-operated with ASIC’s investigation over the last two years.
Commonwealth Bank disputes the allegations made by ASIC. As this matter is before the courts, it is not appropriate to comment further at this time.
Put to one side whether CBA was part of the group of banks that fixed the pricing of BBSW, and the knock-on effect on product pricing; surely this issue was on the “risk” list in the bank, and should have been disclosed.
If it was not, it should have been. This may once again speak to cultural issues in the organisation. There is clearly much to fix. What else is on the risk list?
We discussed the implications on 2GB with Ross Greenwood.
More broadly, we have to consider whether the sheer complexity of the organisation is part of the problem. Perhaps CBA should be split into a series of small entities, for example, separated into its retail division, corporate, wealth, insurance and trading divisions. The question of whether CBA is simply too big and complex to manage, is in our view the underlying and most critical question to be addressed.
