The bank bill swap rate is the primary interest rate benchmark used in Australian financial markets to set rates for business and commercial loans, and ASIC alleges Westpac traded in a manner intended to create an artificial price for bank bills on 16 occasions during the period of April 6, 2010 and June 6, 2012. Prime Minister Malcolm Turnbull had some tough words for Westpac Chairman Lindsay Maxsted in Sydney on Wednesday. Credit:Janie Barrett Earlier this year ASIC launched action against ANZ Banking Group for allegedly rigging the BBSW on 44 days, while the Commonwealth Bank has also been caught up in allegations of unethical behaviour. Mr Turnbull, a former banker who Labor has been keen to frame as a friend of the big end of town, also reminded the major banks that during the global financial crisis the federal government had provided "vital support", saying that Australians understood at the time the necessity of keeping Australia's banking system operating. "We expect our banks to have high standards, we expect them always rigorously to put their customers' interests first, to deal with their depositors and their borrowers, those they advise and those with whom they transact, in precisely the same way they would have them deal with themselves. This is not idealism, this is what we expect," he said.

When Australians asked whether the major banks had done enough in return for that support by living up to legal and community standards "wise bankers such as your leaders [at Westpac] recognise these questions are legitimate. Dismissing them as bank -bashing misses the point". "I make no comment about specific cases, or any specific institutions including where claims of wrongdoing have been disputed. But we have to acknowledge there have been too many troubling incidents over recent times for them simply to be dismissed," he said. "The truth is that despite the public's support offered at their time of need, our bankers have not always treated their customers as they should. Some, regrettably, as we know have taken advantage of fellow Australians and the savings they have spent a lifetime accumulating. "Wise bankers understand that banks need to very publicly demonstrate that their values of trust, integrity, placing the customers first in every way, they must be lived and not just spoken about." Mr Turnbull said it was time banks recognised that remuneration and internal promotion should no longer solely be judged on direct financial contributions to a bank's bottom line.

"The singular pursuit of an extra dollar of profit at the expense of those values is not simply wrong but places at risk the whole social licence, the good name and reputation upon which great institutions depend," he said. After Mr Turnbull's comments, Westpac chief executive Brian Hartzer said he "fully" supported the Prime Minister's remarks, though he also said there was no need for a royal commission into banking after the recent run of scandals. "I think culture in banks is very important. Banks do operate under a social licence, having a banking licence is a privilege and the community rightly expects a high standard of banks and bankers," Mr Hartzer said. "Clearly there have been some negative stories about various players in the industry and that's really unfortunate because it does damage people's trust in the community." The Australian Bankers' Association chief executive, Steven Munchenberg, defended the banks, saying they were addressing "legitimate concerns" regarding inappropriate behaviour and misconduct.

"The industry knows that ensuring the integrity of the banking system is vital for all participants, including customers and banks themselves. Banks support the core of the economy and highly value their social license to operate," Mr Munchenberg said. "Banks will continue to work with regulators to address any legitimate concerns with inappropriate behaviour or misconduct," Mr Munchenberg said. "Banks have shown in the past they will act when they are made aware of behaviour contrary to their values and codes of conduct," he said. Loading Follow us on Twitter