It got to the point where the sales culture in our banks resembled a cult and the leaders of these cults were the rock star chief executives, some of whom weren’t even bankers.

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The competitive lunacy entered its final stage when, sales getting harder to come by, the focus shifted to driving down costs to squeeze out more profits. Arbitrary targets for cost reduction were invested with the wisdom of holy writ.

The costs that were cut couldn’t be the sales teams because that would be self defeating, the prime targets were thus the back office costs, the systems and compliance; the things that had hitherto kept the banks out of trouble.

The Austrac money-laundering debacle at CBA is just one of many scandals that resulted.

All of this of course went on under the benevolent and indolent gaze of the boards who were meant to be safeguarding the shareholders’ interests.

The recent Australian Prudential Regulation Authority report on CBA laid bare just how hands off and ineffectual these boards have been. It is long past time they were held to account.

This conduct also occurred in a regulatory vacuum. In the case of the Australian Securities and Investment Commission it was not so much a case of being out to lunch as having never turned up in the first place. ASIC’s palpable weakness engendered contempt for regulators generally that was perhaps not fully justified in the case of Austrac.

Management greed and incompetence, board indifference and regulator absenteeism all contributed to the raft of bank scandals that led to the royal commission. The CBA money laundering scandal was literally the straw that broke the camel’s back, the final scandal that made the Banking Royal Commission unavoidable for the government.  That alone would make it significant.

Coming after a decade of very public bank misconduct though, the Austrac case is also different in other ways. Instead of the usual cosy deal behind closed doors Austrac chose to very publicly indict CBA. The $700 million penalty is huge by our standards, though but a fraction of what a US regulator would have imposed.

The fact that CBA was willing to pay this, to clear the decks, also tells you a lot about where the banks are at now that the royal commission is underway.

In that sense it may be that the CBA Austrac case, together with the reprehensible conduct being exposed in the royal commission, will represent “peak banking bad” for this cycle. Given where we are now, it would be astonishing if things didn’t improve.

The fly in the ointment though is that the $700 million penalty basically falls on the shareholders of the CBA. For this penalty to be effective these shareholders, the owners of the company, must hold to account those responsible.

Jeff Morris is the whistleblower who blew the lid on misconduct at the Commonwealth Bank's financial planning division and campaigned for the banking royal commission.