National Australia Bank (NAB) has fired three senior executives and five traders after a report into a trading scandal that cost the bank 360 million Australian dollars (€220 million).
The firings follow the departure of the bank's chief executive and chairman.
NAB chairman, Mr Graham Kraehe, said the board would also enhance its governance processes, including the annual review of board performances and a review of individual directors before they stand for re-election at it next annual general meeting.
The announcement was made after the board reviewed the findings of an investigation of the fraud by accountants PricewaterhouseCoopers (PwC).
"The board is confident that a full and fair assessment of all issues has been undertaken and that appropriate remedial actions are being taken to address all of the issues raised and to prevent them from recurring," he said.
The fraud was perpetrated by four currency options traders who, according to PwC, exploited loopholes and weaknesses in systems and processes to hide trading losses and to protect bonuses. A number of junior employees had reported the losses to management figures. No customers were at a loss directly as a result of the fraud.
PwC concluded that NAB's markets division had inadequate management supervision, significant gaps in back-office monitoring functions and weaknesses in control procedures. The report also highlighted an absence of appropriate financial controls.
"There is not a suitable compliance culture within this area and a tendency to suppress bad news rather than to be open and transparent about problems."
The report added that individuals at the bank, regulators and other market participants, ignored warning signals.
Regulators and policy authorities are continuing to investigate the fraud. NAB chief executive Mr John Stewart said these agencies would determine whether civil or criminal actions would be taken against any individuals.
Mr Steward added that a number of employees within the bank would also be "transferred or counselled" as a result of the events surrounding the unauthorised trading losses.
"We will refine our risk-management framework to get a more appropriate balance between management and policing functions. It is totally unacceptable that employees of the National breach policies and control limits," he said.
