Aus­tralian bank cus­tomers urged to seek op­tions

La­hore, Is­lam­abad, Karachi Mon­day, De­cem­ber 06, 2010, Zul Haj 29, 1431

The Pak Banker - - Front Page -

FC . . . . . . Buy­ing . . . Sell­ing

SYD­NEY: Aus­tralian Trea­surer Wayne Swan urged bank cus­tomers to con­sider loans and ser­vices from credit unions and build­ing so­ci­eties as he pre­pares to re­lease pro­pos­als to in­crease com­pe­ti­tion against the nation's four largest banks.

"Com­pe­ti­tion from smaller len­ders in the bank­ing sec­tor has to be ac­ti­vated by em­pow­er­ing con­sumers to shop around," Swan said in a state­ment.

" I'd en­cour­age ev­ery Aus­tralian fam­ily to check out the range of prod­ucts on of­fer."

Swan has said he'll is­sue a pack­age of re­forms this month to re­duce the dom­i­nance of West­pac Bank­ing Corp., Com­mon­wealth Bank of Aus­tralia, Na­tional Aus­tralia Bank Ltd. and Aus­tralia & New Zealand Bank­ing Group Ltd. Calls from politi­cians to rein in the four len­ders have mounted af­ter they last month in­creased mort­gage rates faster than the cen­tral bank raised bor­row­ing costs.

Ac­cord­ing to Swan, many Aus­tralians don't know they can buy ser­vices from 60 credit unions and build­ing so­ci­eties, which are in­sti­tu­tions owned by their cus­tomers, at post of­fices.

He will prob­a­bly present his pro­pos­als, in­clud­ing ways to help build­ing so­ci­eties and credit unions is­sue more loans, to the Cabi­net to­mor­row and an an­nounce­ment is likely Dec. 9 or Dec. 10, ac­cord­ing to the Mel­bourne-based Age news­pa­per.

Pub­lic de­bate on com­pe­ti­tion in fi­nan­cial-ser­vices is in­creas­ing as key fig­ures in the in­dus­try con­trib­ute to a Se­nate in­quiry. Cen­tral Bank Gover­nor Glenn Stevens is due to ap­pear be­fore the com­mit­tee on Dec. 13.

West­pac, Aus­tralia's sec­ond-largest lender, last week pub­lished its sub­mis­sion, say­ing there are cur­rently 179 en­ti­ties com­pet­ing bank­ing ser­vices.

Chief Ex­ec­u­tive Of­fi­cer Gail Kelly called on the govern­ment to in­tro­duce mea­sures that re­duce ma­jor banks' re­liance on off­shore funds, which has be­come more ex­pen­sive since the global fi­nan­cial cri­sis. The biggest banks have blamed those costs for driv­ing up mort­gage prices. Kelly also said a "wide-rang­ing" in­quiry should wait as long as four years, un­til the re­sults of new world­wide rules on liq­uid­ity and cap­i­tal rules be­come clearer.

In an in­ter­view yes­ter­day in the Aus­tralian Fi­nan­cial Re­view, Kelly said the only way to re­duce mort­gage prices is to help banks ob­tain cheaper sources of fund­ing.

Aus­tralia's four largest banks used the global fi­nan­cial cri­sis to tighten their grip on the home-loan mar­ket as smaller bank strug­gled to ac­cess credit. -PB News

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