Industry leaders dispute banking reforms
by Keris Lahiff
Following the release of Treasurer Wayne Swan’s proposed legislative reforms on Sunday, there has been much debate over whether the intended changes will increase competition and stability in the industry.
Three of the Big Four banks weighed in on the debate yesterday – Commonwealth Bank boss Ralph Norris, ANZ chief executive Mike Smith, and Westpac chairman Ted Evans. They each stated that competition in the industry was intense and signalled that any increase would do little to ease the pressure on interest rates.
Treasury Secretary Ken Henry, who was involved in developing the reforms, agreed that competition was still fierce in the industry.
“The repricing of home loans and other lending products could simply be a response to changes in funding costs and a reassessment of risk,” Henry told the Australasian Finance and Banking Conference yesterday.
Norris told a Senate committee yesterday that he made “no excuse” for pricing inappropriately for risk, especially for business lending products.
“I don’t think anybody should be of the view that we don’t risk in the future another crisis in banking or finance,” said Norris. “From my perspective I make no excuse for being prudent. We are looking after our depositors' money. Our depositors want to be able to come to the bank and have security of receiving that money back.”
Evans, yesterday at Westpac’s annual meeting, urged governments to play their part in keeping the banking sector sustainable.
“Many of the ideas emerging in public debate in recent times would not serve that fundamental objective,” he said.
The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer and Paul Rickard the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.
Published on: Thursday, December 16, 2010