Powered by MOMENTUM MEDIA
subscribe to our newsletter

‘No room’ for delayed banking reforms: COBA

The Customer Owned Banking Association has issued a warning against any delays to Australia’s banking reforms, amid concerns that some reforms could take up to five years to implement.

COBA chief executive Mark Degotardi says there is no room for delays when it comes to Australia’s banking reforms.

“The banking market is concentrated, is described by the competition regulator as ‘a bit cosy’ and has left many consumers let down through financial scandals,” he said.

“The Financial System Inquiry issued a reform agenda in 2014 that the government has endorsed. That will reduce the advantages the larger banks have over their small counterparts, increasing competition and leading to better outcomes for consumers.

“However, the banking regulator APRA [recently] announced it is deferring a separate package of capital reforms until at least 2019 pending progress on the FSI capital reforms.”

Advertisement
Advertisement

Mr Degotardi said this would only result in a slowdown of implementation of the FSI agenda.

“APRA says new capital requirements for conglomerates may need to be changed once other initiatives have been progressed, including FSI recommendations one and three on resilience, so implementation is to be deferred to no earlier than 2019.

“Five years is too long between diagnosing the problem and applying the solution.

“The government’s timetable is by the end of 2016, APRA is to take additional steps to ensure our banks have unquestionably strong capital ratios in line with FSI recommendation one. Beyond 2016, APRA is to ensure our banks have appropriate total loss-absorbing capacity and leverage ratios in place, in line with FSI recommendation three.”

Mr Degotardi added that COBA backed the government’s position that steps should be taken to reduce any implicit government guarantee and the perception that some banks were too big to fail.

PROMOTED CONTENT


“Australian consumers should not have to wait until 2019 or beyond for the implementation of reforms that will deliver a more resilient and competitive banking market,” he said.

[Related: Fear of further rate hikes drives spike in fixed-rate mortgages]

‘No room’ for delayed banking reforms: COBA
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Latest News

The chief of Australia’s largest bank has said lenders should act pre-emptively and shift their floor rates for mortgage serviceability am...

Total household wealth reached a high of $13.4 trillion in the June quarter, primarily due to rising property prices, according to the Aust...

The property exchange settlement platform has been granted approval to establish an Electronic Lodgement Network in the ACT.  ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.