Four of Australia’s smaller banks have called for a fairer playing field in the big four-dominated financial sector.
Four of Australia’s smaller banks have joined forces to call on an inquiry into the financial system to provide a level playing field against the big four.
Bank of Queensland, Bendigo and Adelaide Bank, ME Bank and Suncorp Bank have launched a joint submission to the Abbott government’s
Financial System Inquiry, calling for a fairer regulatory environment.
The four lenders argue regulatory changes made since the global financial crisis had given the big four banks – Commonwealth, National Australia Bank, ANZ and Westpac – an unfair advantage over smaller institutions.
“Since the GFC, regulatory and market developments have given the major banks capital and funding advantages over everyone else,” Bank of Queensland chief executive Stuart Grimshaw.
One of the key recommendations included in the submission is a reduction in the amount of capital smaller lenders are required to hold against mortgages.
Smaller banks say they are required to hold almost three times as much capital as the big four banks for mortgage portfolios with comparable risk.
ME Bank boss Jaimie McPhee said the advantages enjoyed by the big banks, as well as their market power, was not in the best interests of competition or consumers.
“We have one of the most highly concentrated markets in the globe,” he said.
“I think when you get a greater level of concentration you get oligopolies and oligopolistic behavior and I actually don’t think that’s in the best interests of the consumer.”
Meanwhile, Commonwealth Bank has lodged its submission to the inquiry, calling for greater regulation of the developing digital financial services sector.
The Financial System Inquiry, headed by former Commonwealth Bank boss David Murray, is expected to release an interim report in mid-2014.