Big 4 refute Productivity Commissions view on competition
(1 March 2018 – Australia) Productivity Commission chairman Peter Harris told two major banks that the widening spread between the RBAs official cash rate and the interest rates paid by borrowers since the GFC is evidence that competition is lacking.
NAB and CBA both refuted the claim and described competition as “truly intense” and “alive and kicking” in the market. NAB chief operating officer Antony Cahill made the point that competition must be balanced with stability and that it is important the market is “both secure and sustainable.”
Credit unions and non-big four domestic banks supported the idea of bolstering the role of the ACCC to help level the playing field and the call for capital levels to better reflect risk.
CBA and NAB supported many of the recommendations from the PC’s draft report including stronger duties on mortgage brokers to act in a clients best interest however maintained this should apply to all brokers, not just the ones owned by the major banks.
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