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Opinion

Australia will rue missed chance to cut banks down to size

Commission addressed misconduct but not underlying problems in an over-mighty sector

| Australia, New Zealand, Pacific Islands
Australia's banking industry has long failed to act in the best interests of clients.   © Reuters

The financial market's verdict on the Australian Banking Commission's report into misconduct in the sector was a large rally in bank shares.

There was widespread relief that the recommendations will not hit bank profits, beyond the relatively modest costs of client compensation and other remedies already factored into forecast earnings.

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