A volcano of fury and frustration has erupted over the lack of competition in the banking sector, prompting political promises to toughen the regulation of the big banks.
Opposition treasury spokesman Joe Hockey has announced a ‘nine point plan’ to investigate alleged price signalling among the big banks and to inject better competition for consumers.
Mr Hockey’s plans follow the Commonwealth Bank’s decision to lift its mortgage rates nearly double the Reserve Bank of Australia’s (RBA) rate hike this week. The major lifted its standard variable rate by 0.45 per cent, 0.20 per cent above the official hike to the RBA cash rate.
Among the nine points proposed by Mr Hockey, is to give power to the Australian Competition and Consumer Commission (ACCC) to investigate collusive price signalling among the big banks, which they have recently been accused of.
He has also recommended new investigations into ways the treasury and the RBA can improve liquidity in mortgage backed securities markets – a key to improving funding for smaller lenders, a result of which will be improved competition.
While Mr Hockey’s ‘nine point plan’ encompasses plenty of good ideas; just whether any of his proposed initiatives to break down some of that power the big banks encompass will remain to be seen however.
The Coalition is pushing for Hockey’s plan to be debated in the next sitting of parliament on November 15. But as with any political positioning and regulation, any progress is bound to take a time.