Senate Bank Inquiry just scratching the surface

14/12/10

Chair of the Senate Economic References Committee, Liberal Senator David Bushby, who is heading the Banking Competition Inquiry, said today that the Bank Inquiry was just beginning to scratch the surface of competition issues facing the banking sector.

"While Mr Swan’s proposals directly reflect some needed reform pushed on him by the Coalition and community concerns, the hearings appear to show there is still a long way to go before we see a real and substantive increase in competition," Senator Bushby said.

"Mr Swan's proposals have provided the Bank Inquiry an opportunity to put a microscope to them.

What has become clear is there have been no substantive proposals to introduce more institutional competition and certainly no measures to increase access to wholesale funding to reduce interest rates."

Senator Bushby pointed out that two days into the Inquiry the Committee had seen little evidence of the government introducing real competition into the banking sector and no pressure on interest rates.

Senator Bushby said the Senate Bank Inquiry would continue to take evidence on why competition had depleted in the market, what was needed to create more players in the market, what could be done to create greater access to wholesale funding leading to a reduction in interest rates and fees.