HomeView 2016 Media ReleasesCOBA warns against delays to banking reforms

COBA has warned against any delay to reforming Australia’s banking market, as indications emerge that some reforms could take as long as five years to implement.

COBA has warned against any delay to reforming Australia’s banking market, as indications emerge that some reforms could take as long as five years to implement.

“These reforms need to stay on track, there’s simply no room for delay,” COBA CEO Mark Degotardi said.

“The banking market is concentrated, is described by the competition regulator as ‘a bit cosy’ and has left many consumers let down through financial scandals.

“The Financial System Inquiry issued a reform agenda in 2014 that the Government has endorsed. That will reduce the advantages the larger banks have over their smaller counterparts, increasing competition and leading to better outcomes for consumers.

“However, the banking regulator APRA this week announced it is deferring a separate package of capital reforms until at least 2019 pending progress on the FSI capital reforms.

“APRA says new capital requirements for conglomerates may need to be changed once other initiatives have been progressed, including FSI recommendations 1 and 3 on resilience, so implementation is to be deferred to no earlier than 2019.

“This increases the risk of a slowdown in implementing the FSI agenda.

“Five years is too long between diagnosing the problem and applying the solution.

“The Government’s timetable is by the end of 2016 APRA is to take additional steps to ensure our banks have unquestionably strong capital ratios in line with FSI Recommendation 1.

“Beyond 2016, APRA is to ensure our banks have appropriate total loss-absorbing capacity and leverage ratios in place in line with FSI Recommendation 3.

“COBA strongly supports the Government’s position that steps should be taken to reduce any implicit government guarantee and the perception that some banks are too big to fail.

“Australian consumers should not have to wait until 2019 or beyond for the implementation of reforms that will deliver a more resilient and competitive banking market.”

Media Release129.55 KB

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 

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