A$8 billion injected to create competition
(12 October 2009 – Australia) Australian Treasurer, Wayne Swan, has announced an extra eight billion dollars in aid to help cash strapped small home lenders compete against the Big Four.
The Government’s aim is to continue to provide a major boost to smaller lenders and promote competition in the mortgage market, helping to put downward pressure on borrowing rates over time.
Currently the initiative has helped provide funding for smaller mortgage lenders including five non-major Australian banks, four building societies and credit unions, and four non-ADI lenders.
Since the beginning of the global financial crisis in mid 2007, the Big Four have increased their share of the home loan market from 60 percent to 81 percent. During this time, the smaller non-bank lenders share has collapsed from 12 percent to 2.5 percent.
The Government's investments have enabled smaller lenders to lend at competitive rates of interest and maintain a higher level of lending and market share than would otherwise have been possible.
Australian Treasure, Wayne Swan said, that the Government is committed to ensuring Australia has a competitive and healthy banking system, which gives consumers a wide range of financial products at competitive prices.
The Government wants to ensure the banking system works for Australian families and businesses, not against them, and this funding boost is designed to deliver on that commitment, Mr Swan added.
Should market conditions improve sufficiently, the Government will assess whether the full $8 billion extension program is required.
Currently the initiative has helped provide funding for smaller mortgage lenders including five non-major Australian banks, four building societies and credit unions, and four non-ADI lenders.
Since the beginning of the global financial crisis in mid 2007, the Big Four have increased their share of the home loan market from 60 percent to 81 percent. During this time, the smaller non-bank lenders share has collapsed from 12 percent to 2.5 percent.
The Government's investments have enabled smaller lenders to lend at competitive rates of interest and maintain a higher level of lending and market share than would otherwise have been possible.
Australian Treasure, Wayne Swan said, that the Government is committed to ensuring Australia has a competitive and healthy banking system, which gives consumers a wide range of financial products at competitive prices.
The Government wants to ensure the banking system works for Australian families and businesses, not against them, and this funding boost is designed to deliver on that commitment, Mr Swan added.
Should market conditions improve sufficiently, the Government will assess whether the full $8 billion extension program is required.
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