Non-bank lender Firstmac has expressed its disappointment with the Murray Inquiry’s interim report for failing to address restrictions to obtaining ADI status.
The retort comes after Firstmac’s submission to the Financial System Inquiry highlighted the fact that Australian banking regulations restrict private ownership of an ADI to 15 per cent.
“Perhaps I was being overly optimistic that the review would take a real look at the protectionist attitudes towards banks in Australia,” Firstmac managing director Kim Cannon said.
“Instead, the review seems to indicate competition in the sector is healthy; I suppose it is, if you happen to be one of the big four banks who doesn’t need to dabble in competition much beyond keeping up with the other three,” he said.
Mr Cannon said this creates the ideal environment for big banks to maintain their dominance.
“How does anyone with an appetite for competition get a foothold in the sector to shake things up and give customers some choice?” he said, noting that competition in the banking sector was the reason the treasurer called for the inquiry in the first place.
“Firstmac’s submission to the FSI argued for easing of restrictions on private ownership of ADIs.
“It looks like that went in the circular file,” he said.
The Mortgage and Finance Association of Australia echoed Firstmac’s call for increased competition in a submission to the Senate Inquiry into Housing Affordability.
The MFAA claims APRA regulations keep the average interest rates available to borrowers higher than they could be, asserting that the major banks hold 79 per cent of the mortgage market, compared with 58 per cent before the global financial crisis.