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Swan: “banking competition” « Previous | |Next »
December 6, 2010

Wayne Swan will soon make public his “banking competition” package to address the problem of the "too-big-to-fail" banking cartel in the context of the politics of "populist" bank basing", a Senate banking inquiry, and probability that they’re going to be exempted from the tougher capital rules that Basel III will impose on the 25 most ‘systematically important’ banks in the world.

Early leaks to the press suggest that Swan's “banking competition” package:

(1) will give assistance to the smaller banks, building societies and credit unions, most likely by extending a government guarantee to their borrowings and also by guaranteeing their deposits even after a government guarantee on all deposits expires late next year.

(2) ensure consumers get better information at the point of sale, with mortgage and credit card providers required to present accurate information as to the likely costs.

(3) give a greater role to the ACCC to oversee the banks, to ensure that their fees are justified by costs and to regulate ‘‘price signalling’’ by the banks.

The problem here is that better informed and empowered consumers does not lead to "shopping around" because the banking cartel is able to because put in place impediments to those who want to move their business elsewhere. So much for competition.

We still have the problems left over the global financial crisis-the banks are still not lending to small business and property development.

| Posted by Gary Sauer-Thompson at 11:59 AM | | Comments (1)


Michael Stutchbury in The Australian is an apologist for the banking cartel.