Shadow treasurer Joe Hockey has argued for change. The Prime Minister has promised change. The ‘big four’ banks, it has been reported, have indicated (apart from their rates pricing) that they are likely to reduce or remove mortgage exit fees before any regulation is imposed by the government.
(See links below for discussion of this issue):
ABC online: http://www.abc.net.au/news/stories/2010/11/08/3059734.htm
The Drum (ABC): http://www.abc.net.au/news/stories/2010/11/05/3058578.htm?site=thedrum
The Age newspaper: http://www.theage.com.au/business/new-bank-guidelines-to-define-term-gouging-20101107-17iy9.html
The Australian newspaper: http://www.theaustralian.com.au/national-affairs/banks-should-offer-competitive-deals-says-opposition/story-fn59niix-1225949358548
Is it about fairness, or is it a populist ‘bank-bashing’ exercise? A strong banking sector is arguably essential to a healthy and functioning economy. In fact, it is often lauded as a reason why the Australian economy avoided a technical recession during the global financial crisis (GFC). However, carefully designed and implemented regulation is also an essential ingredient.
A balance needs to be struck between smart regulation to promote competition while allowing the major banks to remain strong.
The government is under pressure from all sides on this issue and, while the sentiment for competition and change is strong within the community, with the power weilded by the banking lobby it is hard to see how they will be substantially tamed to the point of even denting the $5b profit reporting.
Filed under: Australian Politics, General
