Author: Don Magin

Greater backs Senate call for financial system inquiry

Our CEO Don Magin says the Greater Building Society backs a Senate Committee report which calls for an “independent, well-resourced and comprehensive inquiry” into the Australian financial system. 

On Wednesday November 28, the Senate Standing Committees on Economics delivered its post-GFC banking sector report. Its key recommendation is for a broad financial system inquiry. The report says “there is now an opportunity to conduct a comprehensive examination of the banking sector and to debate what the post-crisis sector should look like and whether it is delivering what Australians want from it”.

The Greater Building Society joins Abacus, the industry body for Australia’s credit unions, building societies and mutual banks in backing the call for an inquiry. (As well as being The Greater’s CEO I am also the Chairman of Abacus.) Abacus commissioned a report by Deloitte Access Economics published in August, which also recommended such an inquiry be held. At the time I blogged on why an inquiry would be good for consumers.

Parts of regional NSW and the Gold Coast are fortunate to have strong, well-managed, mutual (customer-owned) financial institutions, such as The Greater, who performed well during the GFC. He said these building societies, credit unions and mutual banks are offering competition to the major banks with competitive rates, lower fees and superior service.

The problem is that the major banks’ dominance and other institutional mechanisms such as the Government Guarantee means that banks can obtain funds at a lower price than mutuals.

Mutuals are offering competition for the benefit of local people with one hand tied behind their backs. We need an inquiry to create a level playing field to ensure there is sustainable competition to the banks that will benefit Australians.

What do you think? Do you support a call for an inquiry?