Treasury welcomes the opportunity to provide a separate submission to the Royal Commission concerning three matters that go to the heart of the instances of misconduct and failures to meet community standards brought to light during the hearings to date. These three matters are:

• the culture and governance of financial (and other) firms and the related regulatory framework;
• the capability and effectiveness of the financial system regulators to identify and address misconduct; and
• conflicts of interest arising from conflicted remuneration and integrated business models

In examining these matters, this submission does not make recommendations, but seeks to set out the issues involved, the current regulatory framework and how it developed, and the trade-offs involved in various responses to these matters that the Commission could consider. Future hearings may raise additional issues requiring consideration.