The federal government’s response to the Financial System Inquiry will improve stability across the nation’s banking system, according to industry super fund-owned bank ME.
Jamie McPhee, chief executive of ME, welcomed the move by the government, saying it will progress bank capital levels and competition while complimenting the processes already initiated by APRA.
“We commend Financial System Inquiry head, David Murray, and the other panel members, on their thoughtful, considered analysis of the Australian financial system,” he said.
“We are particularly pleased to see the government will take steps to reduce any implicit government guarantee and the perception that some banks are too big to fail, which has had the effect of giving the major banks significant competitive advantages in the cost of funding.”
Mr McPhee said although the recommendation surrounding comprehensive credit reporting was not accepted, it would not come as a surprise to see it implemented at a later date.
“While we accept the government does not yet see the need to legislate for mandatory participation in comprehensive credit reporting, this may still be required as comprehensive data sharing is less likely to occur in highly concentrated banking markets such as Australia. The number of participants sharing comprehensive credit data is critical to the success of the regime,” he said.
“ME is committed to working closely with the government and agencies in the implementation and further consideration of the Murray review.”