The Financial System Inquiry looks unlikely to challenge the “protectionist attitudes towards banks in Australia”, according to one non-bank lender.
Firstmac managing director Kim Cannon wrote in a blog for The Adviser that the federal inquiry appears unwilling or unable to modernise banking legislation.
“Unfortunately, the Murray Review looks like it is not the vehicle to drive that reform, even though it was touted as having the capacity to pull legislation regulating the Australian financial sector into the current age,” he said.
Mr Cannon said technological innovation was generating savings that could be passed on to consumers through lower fees and interest rates.
“As long as the big four banks are allowed to maintain their stranglehold on the finance sector, competition will be limited and customers will continue to pay more,” he said.
“Market conditions are ripe for banking products to be opened up to greater competition in the same way home loans were in the early 1990s.
“But under the current legislation, it can’t happen and the content of the Murray Review interim report shows the Financial System Inquiry has no interest in addressing that.”