The Westpac Bank is not a bank, the US Federal Reserve says
The US Federal Government’s central bank says it does not recognise the Westpac Banking Corporation, the Australian-owned bank that has been accused of a widespread culture of corruption.
Key points:The US Federal government has labelled Westpac a “bank of convenience”It is the latest bank to be investigated over the financial crisisThe bank has not been charged and the Government is calling on the company to pay upThe US Treasury has also said it will not be handing over the bank to the US GovernmentThe Westpac is one of the largest banks in Australia, with branches in Sydney, Melbourne and Brisbane.
It is a subsidiary of the Australian National Bank (ANB) which was created in the 1990s and is based in Sydney.
In December, the Federal Government accused Westpac of a systemic culture of financial criminality.
The US Government is now calling on Westpac to pay back $10 billion to the Australian taxpayer.
“This is a bank that is part of the Commonwealth,” Treasury Secretary Jacob J Zuley said.
“We have seen the bank fail, and the Australian Government has not seen it succeed.”
Mr Zuleys comments come as Westpac reported a $US4 billion loss for the financial year ending June 30.
“There is no doubt that the Westpacka experience has given us a clear view of the need for the Commonwealth to make this bank of convenience a priority,” the Treasury said in a statement.
“The Westpackas experience has also provided us with valuable lessons in the role of the Bank of Commerce in promoting Australian economic growth, the need to maintain a strong banking system, and to support the Australian economy.”‘
We need to get on with it’Westpac is under investigation by the US Department of Justice for alleged money laundering, bribery and related crimes.
In November, the Bank said it had “no further comment” on the case.
“As a bank we do not comment on ongoing investigations,” it said in an emailed statement.
The US Justice Department said in March it had launched a criminal investigation into the financial dealings of two of its subsidiaries, the Westpaks Australian Bank and the West Pacific Australia Bank.
The Westpakas Australian Bank was the subject of a separate investigation by a US congressional committee into whether it violated US law by selling a $1.2 billion stake in a coal mine in Queensland.
The inquiry, chaired by US Representative Robert Goodlatte, has resulted in indictments against seven people including two Westpac executives.
The Government is also launching a civil inquiry into the bank.
Westpac said it would not comment further until the inquiry was completed.