Australian regulators raised concerns with National Australia Bank (NAB) over its risk management systems early last year, well before it suffered 360 million Australian dollars (€224 million) in foreign exchange losses.
Mr John Laker, the chairman of the Australian Prudential Regulation Authority (Apra), told a Senate hearing yesterday that NAB had been trying to fix the problems when its rogue trading scandal hit last month.
Australia's largest bank has suspended four members of its foreign exchange options team, alleging they engaged in fictitious and unauthorised trading. The scandal, the biggest of its type in Australia, has led to the resignations of Mr Charles Allen, the bank's chairman, and Mr Frank Cicutto, the chief executive.
Mr Laker told the hearing: "We had identified concerns in the risk management framework of NAB. We had expressed those concerns to the NAB board and management and they were responding to these concerns."
He also said Apra knew NAB had almost twice the foreign currency exposure on a daily basis as Australia's three other big banks combined.
The revelations will fuel criticism that NAB should have appointed a chairman from outside the group rather than Mr Graham Kraehe, the director who led its risk management committee at the time of the losses. - (Financial Times Service)
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