Gvt should ensure banks follow RBA
One industry stakeholder is calling on the government to introduce a national surveillance regime to ensure Australia's majors follow any rate changes announced by the RBA.
Chan & Naylor director Ken Raiss said the majors must be subject to greater government scrutiny if they don't pass on future interest rates changes.
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"The big four's previous rate cut irreverence has potentially muted monetary policy and challenged the authority of the RBA," said Mr Raiss.
"A surveillance regime needs to be established to prevent a further decoupling of interest and lending rates."
According to Mr Raiss, over the past decade Australian banks have been allowed to build an infrastructure around themselves that is now deemed "untouchable".
"If the government does not act fast then they will be left with all the power of a 'one armed Muhammad Ali' fighting an opponent with a much bigger 'credit control' stick," he said.
"Australia needs a strong banking sector but this needs to be balanced against a viable overall economy."
