The head of Australia's second-largest bank, Westpac, has quit over a money laundering scandal involving child exploitation by paedophiles.
The departure of chief executive Brian Hartzer comes just a day after he told staff it was "not a major issue" and that he planned to stay on.
Westpac was sued by Australian regulators last week for an alleged 23 million breaches of counter-terrorism financing and money-laundering laws. Most of the offences concerned the late reporting of overseas transactions.
As CEO, I accept that I am ultimately accountable for everything that happens at the bank"
But Australia's anti-money laundering and terrorism financing regulator AUSTRAC said some of the transactions were also potentially linked to "child exploitation risks".
Westpac offered a low-cost international payment service called LitePay, which facilitates low-value international transfers out of Australia, including to "higher risk" jurisdictions. Among the more shocking claims is that Westpac failed to carry out due diligence on 12 customers who sent money to the Philippines and South East Asia for known child exploitation risks via LitePay.
AUSTRAC said Westpac knew since at least 2013 the heightened child exploitation risks associated with frequent low value payments to the regions, and that the bank's senior management was briefed on these risks in June 2016. AUSTRAC says it was not until June 2018 that Westpac implemented an appropriate automated detection scenario to monitor for known child exploitation risks through LitePay.
Hartzer said: "As CEO, I accept that I am ultimately accountable for everything that happens at the bank. And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves."
It was reported by The Australian newspaper that Hartzer previously told his executive team that the scandal was "not an Enron or Lehman Brothers" and the Australian public were not overly concerned and so there was no need to "overcook" the scandal. Peter Dutton, Australia's home affairs minister, on Monday alleged the bank had "given a free pass to paedophiles".
The Labor opposition spokesman, Jim Chalmers, said the failures of Westpac in recent times were "nothing short of disgraceful".
Hartzer, who leaves next week, was given 12 months' notice and will still receive his £1.4m salary.
The country's scandal-plagued banking sector was recently interrogated in a royal commission - Australia's highest form of public inquiry- which found widespread wrongdoing in the industry.
Hartzer is the third chief executive among Australia's "big four" banks to depart since the royal commission began in 2018.
Westpac released a statement outlining its response plan to AUSTRAC's legal action, with chairman Lindsay Maxsted saying the bank was "determined to urgently fix issues".
These new commitments include closing LitePay, lifting standards through priority screening, and investing in initiatives to reduce the human impact of financial crime.