(9 May 2011 – Australia) The Senate inquiry into banking competition urged the government to rethink key measures designed to help smaller banks.The report stated there was no “silver bullet” when it came to increasing competition and called for changes to deliver customers a better deal.
The committee has 38 recommendations, including a call to Treasurer Wayne Swan to reconsider the ban on mortgage exit fees.
Banning exit fees could lead to higher upfront fees, including for borrowers who never incur exit fees, according to the report.
Also recommended was that the government change its wholesale-funding guarantee so smaller lenders were charged the same as the big banks.
After seven months of investigation, the committee rejected proposals to rein in the big four banks through regulation or a government owned bank, instead recommending a broader review into the financial system.
The chief executive of the Australian Bankers Association, Steven Munchenberg, said policymakers’ main concern should be on providing smaller players with competitive access to funding.