Australia bows to pressure with inquiry into bank misconduct

The Australian government has bowed to growing pressure by announcing a high-level inquiry into misconduct in Australia's financial sector.

Prime Minister Malcolm Turnbull on Thursday announced a royal commission — the highest form of investigation in Australia — into the banking, pension and financial services industries.

Turnbull's conservative coalition has been resisting the center-left opposition Labor Party's calls for such an inquiry for almost two years.

But the turning point came when the chief executives of Australia's four largest banks wrote to the government on Thursday requesting a "properly constituted inquiry, because uncertainty was "hurting confidence."

If the government had not established a royal commission, some government lawmakers threatened to support a Labor bid to have the Parliament set up its own inquiry into allegations of misconduct.