Banking Sector Reform

05/11/10

Banking Sector Reform – the Coalition’s 9-point policy recommendations:

1: Give the ACCC power to investigate anti-competitive price signalling.

2: Encourage the Australian Prudential Regulation Authority to investigate whether the major banks are taking on unnecessary risks trying to maximise short-term returns.

3: Mandate the RBA to publish regular reports on bank net interest margins, returns on equity, and profitability to determine whether the major banks are extracting monopolistic profits.

4: Investigate allowing Aussie Post to make its 3,800 branches available as distribution channels for smaller lenders.

5: Ask the Treasury and the RBA to investigate ways to further improve the liquidity of the residential and commercial mortgage backed securities markets.

6: Explore further simplification of the Financial Services Reform Act, to make the business of actually getting out and doing business easier.

7: Direct the Australian Prudential Regulation Authority to explore whether the risk-weightings on business loans secured by residential properties are punitive.

8: Commission a resolution to the debate about whether the banks should be able to issue “covered bonds”.

9: And let’s wrap up all of this work into a full review of the financial system.