Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Government urged to facilitate better market competition

Staff Reporter 1 minute read

Building societies and credit unions have urged the federal government to act to preserve competition in the banking sector and called for a review of the wholesale funding guarantee and action to resuscitate securitisation.

In a submission to a parliamentary inquiry, the industry body for mutuals Abacus said the government needed to revisit its wholesale guarantee scheme and introduce a flat fee, or at least a flatter fee structure, in order to remove the strong bias that currently favoured the major banks.

“An unintended consequence of the guarantee arrangements is a strengthening of the major banks’ market power,” said Abacus CEO Louise Petschler today.

Credit unions and building societies must pay 1.5 per cent for the guarantee, while major banks pay 0.7 per cent, she said.

“Access to wholesale funding will assist mutual ADIs to put competitive pressure on major banks in the interests of Australian households and small businesses.”

Advertisement
Advertisement

Ms Petschler said the submission also called for action to reinvigorate the securitisation market such as a consideration of a system like the Canadian Mortgage Bond Scheme which has boosted competition in Canada.

Government urged to facilitate better market competition
default
TheAdviser logo
default

TODAY'S POLL

View results >

Who do you aggregate through?

Thank you for your vote, you can see the results here.

more from the adviser
question mark 850 Brokers reveal which lenders are leading the way

The results are in for the Third-Party Lending Report 2020, revea...

board room office ta Lender revamps broker team

A low-deposit mortgage lender has announced changes to its third-...

build SMEs showing greater resilience to COVID-19

Businesses with an annual turnover of less than $200,000 have far...

FROM THE WEB