Regional banks want same regulations and guarantees as the Big Four
(28 March 2018 – Australia) Kinks in the supply side of lending are putting the future of competition at risk unless policies are implemented to help raise funding more cheaply, said six of Australia’s largest regional banks.
AMP, Bendigo and Adelaide Bank, BoQ, ME, MyState and Suncorp have made a joint submission to the Productivity Commission arguing the government is putting all its eggs into one basket by relying on fintech start-ups to single-handedly boost competition.
Australia’s regional banks say a better approach would be to remove regulatory and prudential distortions that hinder the capacity of smaller banks to take advantage of new demand side policies like open banking.
MyState CEO Melos Sulicich said there were plenty of lenders in the market but “the way the regulatory framework works together, more by accident than design, hampers the ability of the smaller players to provide the alternative we want to”.
The domestic non-big four banks suggest the issues could be addressed by giving smaller banks access to a government guarantee allowing them to raise cheaper wholesale debt. A Further reduction is the risk weight differential between them and the major banks would also work to future-proof lending competition.
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