SMALLER BANKS WANT A FAIR GO
Written on the 2 April 2014
FOUR regional banks have launched a joint submission to the federal government’s Financial System Enquiry, calling for a level playing ground.
Bank of Queensland (BOQ), Suncorp Bank, ME Bank and Bendigo and Adelaide Bank have provided recommendations to restore competitive neutrality for the benefit of consumers.The report argues that regulations introduced during the Global Financial Crisis favour the big four banks, Commonwealth, ANZ, National Australia Bank and Westpac.
Suncorp CEO John Nesbitt says the minor players aren’t after extra funding, which caused the competitive disparity in the first place.“We’re not advocating for government handouts or additional regulatory overlay because this type of intervention creates market distortions as evidenced by the funding and capital advantages afforded Australia’s largest banks.
“Our submission recommends changes to the regulatory settings which have created illogical competitive anomalies,” he says.Recommendations include a 20 per cent risk weighting on residential mortgages, changes to the approval process and greater transparency of ownership structures.
BOQ managing director and CEO Stuart Grimshaw says the suggestions aim to provide long-term economic benefits.“We also believe that our recommendations would help redistribute capital to the areas of our economy that are crying out for investment, such as small business and agribusiness.”
The first round of non-confidential submissions will open to the public on April 4.