BANKS, RBA, GOVERNMENT
Australia’s banks might be starting to feel the pressure as both the government and opposition look at ways to rein in the power of the so-called big four.
This morning opposition treasury spokesman Joe Hockey says he will introduce legislation in federal parliament to reform the Australian banking system.
Mr Hockey has told Fairfax Radio the coalition later on Thursday will announce moves to introduce legislation to give the Australian Competition and Consumer Commission (ACCC) the power to investigate price collusion among the big banks.
It comes after the Commonwealth Bank of Australia (CBA) raised standard variable mortgage rates on Tuesday by 45 basis points, almost double the Reserve Bank’s 25 basis point increase in the cash rate.
Westpac, NAB and ANZ have yet to announce their intentions but previously have flagged increases above official rate movements.
“We are going to get on with the job that the government doesn’t want to do,” Mr Hockey said.
“Australians are now at the point where the opposition is doing the job that they would have expected of their government.”
The Coalition had already flagged it wanted the ACCC to be able to tackle price signalling, Mr Hockey said.
“The legislation has to be right,” he said.
“But given that the government has huffed and puffed about this issue and done nothing, we will get on with the job of doing something for the Australian people.
“We would rather do it co-operatively with the government but quite frankly they are more interested in playing politics than they are in delivering a more competitive banking system.”
Yesterday the federal Treasurer Wayne Swan says a reform package aimed at improving competition in the banking sector will put pressure on the major banks to better behave.
The government is looking at banning exit fees, which can sometimes cost more than $1000.
“There’s a culture of arrogance among the banks,” he told ABC Radio on Wednesday.
Mr Swan says the government has been working on a reform package with regulators.
“It will put pressure on the major banks to behave in a better way,” he told ABC Radio on Wednesday.
Consumer group Choice is also calling for bank customers to be able to switch lenders without paperwork hassles, while still keeping their account numbers.
Tiffany Watson’s thoughts
The RBA, Government and the banks are all the same as far as I am concerned. When was the last time one of the RBA members stepped off there high paying position (which I don’t mind them having) and actually opened up their eyes to see what the majority of Australian’s are actually doing, earning and the way they are struggling.
Due to the fact that we deal with many Australian’s in business, we know they suffer from this continual interest rate rises. Just when they think about employing someone or when they are just about to start getting ahead the interest rate goes up. I wouldn’t mind so much if it was actually founded on the majority of people in Australia.
The government doesn’t do anything and this is a topic that comes to light every time something like this happens. I am sick and tired of hearing all the “we will do something”. Now come on how many time have we heard politicians actually say that yet nothing comes of it. As for the banks, well they are owned by the general public so good luck with stopping them. The share holders want their money and I can’t blame them. If you invest you want a return. This does not mean that I agree with the money hungry banks.
Everyone has to remember that all of this interest rate rising etc all comes back to the simple thing called control. Most of these people are economists that are making these decisions, however they are forgetting the basic rule in economics. The market always finds it’s own equilibrium. SO LET IT FIND IT’S OWN EQUILIBRIUM.
Welcome to the Labour government. High interest rates, spending too much money that’s not there.
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