Banks that increase interest rates above official RBA increases should have their market dominance reviewed by the Government, according to Chan & Naylor.
“The bumper-profits of the big four banks dispel the need for rate increases above Reserve Bank levels,” Chan & Naylor’s chief executive officer Sal Carrero said.
According to Mr Carrero, this practice calls into question the competitiveness of Australian residential lending. Market dominance is emerging as a real threat to the housing sector.
“Market concentration has allowed the major banks to act with impunity. There is a genuine need for greater competition and consumer choice,” he said.
Mr Carrero said banks would be less inclined to increase rates beyond Reserve Bank levels if the competitive environment was more robust.
“Consumers have been let down by banks which continue to abuse their market dominance and it’s time the Federal Government stepped-in.”
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