HomeView 2016 Media ReleasesRoyal Commission won’t change major banks

A Royal Commission into banking scandals may help deliver justice to victims of past major bank misconduct but the key to a better future is implementing the Financial System Inquiry (FSI) reform agenda.

A Royal Commission into banking scandals may help deliver justice to victims of past major bank misconduct but the key to a better future is implementing the Financial System Inquiry (FSI) reform agenda.

“The FSI issued a pro-competitive blueprint in 2014 but there is a lack of urgency about implementing the reforms,” COBA CEO Mark Degotardi said.

“The best way to make major banks lift their game is to increase competitive pressure by levelling the playing field and promoting genuine consumer choice.

“The major banks need to learn the hard way, by losing market share to their smaller competitors.

“At the root of the major bank scandals is a business model that is aimed at maximizing short-term profits.

“Not even a Royal Commission can force the major banks into becoming ‘customer-centric’. The major banks will always put their shareholders before their customers.

“There is only one ‘customer-centric’ business model in the banking market and that is the customer owned model.

“Credit unions, building societies and mutual banks put their customers first because that is why they exist.

“Yet customer owned banking institutions and regional banks do not have a level playing field when they take on the major banks.

“Major banks are gifted a significant subsidy by Australian taxpayers in the form of an implicit Government guarantee.

“Major banks are required to hold much less capital against home loans than their smaller competitors, translating into a potent funding cost advantage.

“Major banks have become so systemically important a senior executive with the prudential regulator recently observed they are ‘almost too big to get sick’.

“The FSI recommendations to fix these problems should be implemented without delay.

“Major banks may or may not have rigged the benchmark interest rate but what is beyond doubt is that the entire banking market is rigged in favour of the major banks.”

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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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