COBA today released its second submission to the Financial System Inquiry, and The Greater Building Society supported the submission's call for a strong banking system to be made even stronger through a genuine commitment to promoting competition.
Acting COBA CEO Mark Degotardi said the FSI is a great opportunity to deliver a more efficient and competitive financial system that never loses sight of the consumer.
“Improving our banking rules will create a level playing field and will secure the long term stability and competitiveness of Australia’s banking sector,” Mr Degotardi said.
“The FSI’s interim report did a great job identifying many of the problems. This progress can’t be lost – the FSI must now recommend real change.
COBA’s submission details positive and constructive measures that will:
- Increase the likelihood that consumers are confident and informed in banking and financial services markets;
- Address the unfair funding cost advantage and risks posed by systemically-important major banks;
- Reduce or get rid of regulatory capital and other rules that unfairly favour larger lenders over smaller ones;
- Change legislative mandates of the key regulators APRA and ASIC to ensure they are more accountable for fostering competition;
- Recognise the stability, diversity and strength of the customer owned model in policy settings.
- COBA’s submission includes new independent analysis on the subsidy provided at no cost by taxpayers to the four major banks. This subsidy is estimated to have a current annual value of between $2.9 billion and $4.5 billion.
COBA’s submission provides a strong overall case for action to promote genuine and sustainable competition.
It describes the FSI interim report’s finding that the banking sector is “competitive, albeit concentrated” as a recipe for complacency.
“The customer owned banking sector is already fighting hard against the dominance of the big banks,” Mr Degotardi said.
“Give us a level regulatory playing field and let us get on with providing more Australians with competitive, responsible and ethical banking services.”
COBA’s submission, including Executive Summary and Key Recommendations, is available at www.customerownedbanking.asn.au