by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Connexus : Issue 41
protect Australia’s banking system for the challenges of the coming decades.” The bastion of consumer rights in Australia, Choice, endorses a review of the financial system. “We would be very supportive of a new independent inquir y, par ticularly cover ing some of the lessons learnt from the global financial crisis,” says Choice policy advisor Elizabeth McNess. “ I think it has highlighted some of the weaknesses in the cur rent system, for which we see consumers have been paying the price,” she says. Competition is at the core of the Choice philosophy, and to that end it launched in March a ‘Move Your Money’ campaign encouraging Australians to look beyond the major bank s. “ We do believe that the big four banks have a market share that is really quite sizeable,” says McNess. “And we are encouraging consumers to look to small institutions and find a better deal.” With Choice research supporting the view that many of the best banking deals in Australia are available through smaller institutions, McNess believes it is impor tant to continue such momentum with a review of the financial system. Petschler says the upshot of more banking competition is greater choice for consumers and encouragement of innovation among financial institutions, which is better for ever yone. She adds that customer-owned mutuals prov ide diversity in banking, with profits returned to members via better products and services and at better value. “Our operating model means by definition we are always looking at ways to provide innovative banking ser vices, value and convenience for our customers,” she says. “Providing a banking system that promotes genuine competition will support the deliver y of even more innovative banking ser vices across the system from institutions big and small. Without it, consumers w ill lose out.” Regulatory rethink The Australian Centre for Financial Studies is another body calling for change. Professor Kevin Davis, research director at the centre and Professor of Finance at the Univer sity of Melbourne, argues that it is appropriate to hold a review now. “ The current Labor government planned to have a ‘daughter of Wallis’ review, but the global financial cr isis got in the way and to some extent it made sense to put off having an inquiry while things @ lOUiSE PETSChlER ON CUSTOmER-OWNEd BANkiNg: The regulatory system we all operate under should recognise customer-owned banking. We don’t seek special treatment but a neutral setting where credit unions, building societies and mutual banks can compete fairly with listed banks. Addressing the issue of funding costs and the regulatory burden for mutuals is at the heart of any long-term review of Australia’s financial system. ElizABETh mCNESS ON CONSUmERS: We very much see these changes as being about ensuring that the financial system is competitive and efficient, that people aren’t being locked into products they know aren’t right for them, and which gives financial institutions the incentive to provide the best possible service to their customers. PROFESSOR kEviN dAviS ON BANk AdvANTAgES: One of the issues is the extent to which large financial institutions actually have inherent advantages from the fact that they’re perceived by society as being too big to fail. One term that we’ve used at the Australia - New Zealand Shadow Financial Regulatory Committee, a group of professors, is ‘too big to swallow’. Basically, if a small institution is in trouble, someone will take it over perhaps with a small incentive, but if one of the big banks was in trouble then they’re just too big for any other institution to swallow or take over. PROFESSOR iAN hARPER ON COmPETiTiON: We do need to carefully consider whether the balance between competition and stability is the right balance for Australia going forward rather than simply accepting this new trade-off which has been pushed at us by the international regulatory system. What they are saying CoverStory www.abacus.org.au 35