Aussie busi­ness groups slam power of big len­ders

The Pak Banker - - Company& -

SYD­NEY: Banks are un­der re­newed pres­sure for squeez­ing busi­ness bor­row­ers, with in­dus­try groups call­ing on govern­ment to level the play­ing field in favour of smaller len­ders.

The Re­serve Bank said credit ex­tended to busi­ness has slumped by $71 bil­lion from its 2008 peak dur­ing the global fi­nan­cial cri­sis. The chief ex­ec­u­tive of the Aus­tralian In­dus­try Group, Heather Rid­out, said in a sub­mis­sion that small and medium com­pa­nies felt ''in the fir­ing line'' from in­creas­ingly dom­i­nant banks that were im­pos­ing stricter lend­ing con­di­tions.

The Aus­tralian Cham­ber of Com­merce and In­dus­try echoed these con­cerns, say­ing the con­trac­tion in busi­ness credit growth was the most se­vere slump since the re­ces­sion of the 1990s. To ad­dress these con­cerns, the busi­ness lobby groups are call­ing on the govern­ment to level the play­ing field in favour of the smaller len­ders that once pro­vided a check on the ma­jors.

For ex­am­ple, Mrs Rid­out said govern­ment guar­an­tees on de­posits should be more

''pro-com­pet­i­tive'', and hur­dles to in­ter­na­tional len­ders resur­fac­ing should be re­moved.

The ACCI called for a ban on fu­ture merg­ers be­tween the big four len­ders, while ask­ing the govern­ment to ex­plore loan guar­an­tees for small busi­nesses.

The Ur­ban Task­force, rep­re­sent­ing prop­erty de­vel­op­ers, said govern­ment should con­sider man­dat­ing the use of superannuation sav­ings to ex­pand the sav­ings pool avail­able for lend­ing. - PB News

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