HomeView 2014 Media Releases FSI report set to be a game changer for banking .

The Customer Owned Banking Association today said the Financial System Inquiry final report is set to be a game changer for banking competition.

“COBA wants a banking regulatory framework that never forgets the consumer, promotes competition and delivers a level playing field for customer-owned banking institutions and smaller listed banks as well as the four major banks,” COBA Acting CEO Mark Degotardi said.

“We hope and expect that the ultimate outcome of the FSI is a diverse banking market, with genuine consumer choice exercised by confident and informed consumers.

“The removal of unfair regulatory capital settings that favour the biggest players will increase stability and competitive pressure in our banking market.”

Since the FSI was established 12 months ago:

  • The prudential regulator APRA has acknowledged that the major banks enjoy a funding cost advantage due to the perception they are ‘too big to fail’;
  • Independent research commissioned by COBA has found that the implicit subsidy provided by the taxpayer to the big four banks is worth up to $4.5 billion per annum;
  • APRA concedes “there may be a case” for a higher capital surcharge on the four systemically-important banks as a tool to reduce the funding cost advantage and to enhance the competitive position between smaller and larger banking institutions; and
  • The consumer protection regulator ASIC has acknowledged the consumer risks posed by major bank multi-branding strategies and by major bank vertical integration of funds management and distribution.

“These are welcome shifts by the regulators on matters of competition and consumer choice in banking,” Mr Degotardi said.

“We look forward to the FSI Final Report recommending measures to level the playing field to improve banking outcomes for Australian consumers.

“It’s time to recognise the stability, diversity and strength of the customer owned model in our policy settings.”

For more information please contact:

Daniel McDougall, Senior Manager – Media and Communication

02 8035 8444 or 0407 637 541, This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Customer Owned Banking Association is the industry body for credit unions, building societies, mutual banks and friendly societies.  See coba3.nexusone.com.au

Download PDF release here


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Sally Mackenzie
Director - Strategy & Stakeholders
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M: +61 412 721 663
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