Investors ripped another A$2 billion from Commonwealth Bank's market value on Monday after the Australian Prudential Regulation Authority said it would launch a "broad" inquiry into culture and conduct at the bank.In an unusual move, the prudential regulator will set up an independent panel to investigate how the bank's governance, culture and accountability frameworks might have contributed to a string of scandals that have damaged its reputation in the last decade.APRA did not say how many experts would be appointed to the independent panel and also conceded it was still working out the terms of reference for the inquiry."The names of the panel members and the agreed terms of reference will be finalised and published at the commencement of the inquiry," the regulator stated in its media release.Established at its own initiative - but encouraged by Treasurer Scott Morrison - the APRA panel's work for now is defined more by what it won't do rather than what it will.?"The independent panel would not be tasked with making specific determinations regarding matters that are currently the subject of legal proceedings, regulatory actions by other regulators, or customers' individual cases," APRA said.The terms of reference, once agreed, will encompass the themes in this paragraph from APRA."Broadly, the goal of the inquiry is to identify any shortcomings in the governance, culture and accountability frameworks and practices within CBA, and make recommendations as to how they are promptly and adequately addressed. "It would include, at a minimum, considering whether the group's organisational structure, governance, financial objectives, remuneration and accountability frameworks are conflicting with sound risk management and compliance outcomes."To rationalise this unprecedented measure, APRA chair Wayne Byres put the background plainly."The Australian community's trust in the banking system has been damaged in recent years, and CBA in particular, has been negatively impacted by a number of issues that have affected the reputation of the bank."A key objective of the inquiry will be to provide CBA with a set of recommendations for organisation and cultural change, where that is identified as being necessary."Non-government politicians are almost certain to respond to the announcement of the inquiry as a ruse from the office of Treasurer Scott Morrison to short-circuit calls for a royal commission into the major banks.The decision to establish an independent panel to audit the bank's culture and processes is a novel one.The regulator's traditional method of intensifying scrutiny of accident-prone banks has been to appoint audit firms to conduct risk management investigations.At the peak of National Australia Bank's currency trading scandal in 2004, APRA hired PriceWaterhouseCoopers to evaluate culture and practices in its wholesale banking arm to buttress its own, interventionist actions.In the case of NAB the main penalty was a higher minimum capital ratio for a time and early exits for the CEO and half the directors.Byers recited some safety language: "CBA is a well capitalised and financially sound institution" for an entity destabilising the Australian banking industry in a manner unique to the modern era."Beyond financial measures, it is also critical to