Govt urged to reform financial system immediately

Smaller banks have called for the government to act swiftly on the implementation of key recommendations presented by the Financial System Inquiry.

The submission made by the Customer Owned Banking Association (COBA) in response to the Murray report said current regulatory settings have stifled competition and let down consumers.

“We have had the debate, the verdict is in, it’s time to act,” COBA chief executive Mark Degotardi said.

“The FSI report lays out a blueprint to promote efficiency and competition, strengthen resilience and enhance consumer trust in the financial system.

“It is a blueprint that should be implemented without delay.”

Mr Degotardi said the first and second recommendations regarding bank regulatory capital should be given top priority, along with recommendations to better protect and inform customers.

He said it is particularly important that the regulators buy into the reform agenda since they will play a crucial role in the implementation of the recommendations.

“Australian consumers deserve a banking market that has diversity and sustainable competition,” Mr Degotardi said. “The regulatory system must allow, not impede, that diversity and sustainability.

“We propose a timetable to keep these reforms on track.”

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