Liability in Defamation and Negligence Following Breach of Bank Secrecy (Australia, UK)

Full paper published in Journal of Financial Crime, vol 8, no 2, 150-155 (November 2000)The obligation of a bank as a matter of contract with its customer to honor its duty of secrecy over the information it holds presents a barrier to an efficient, competitive and informed securities market. Although the operation of bank secrecy has been much reduced by legislation, its continued existence faces increasing pressure from law enforcement agencies.If the bank did reveal customer information without authority, the customer would be entitled to take legal action against the bank for breach of the banker/customer contract. This paper presents an Australian perspective on the potential liability of the bank for defamation and/or negligence for damage arising from an unauthorized disclosure of customer information and the potential liability of the regulator for misuse of information once obtained by the bank by compulsion of law