Australian regulator vows to tackle ‘cosy oligopoly’ of big banks
Australia’s competition regulator plans to wrest open the “cosy oligopoly” of the country’s four largest banks and punish misconduct via the courts, saying competition is the best way to fix the troubled sector.
In an interview before the publication of a public inquiry report into the finance sector on Monday, Rod Sims, chief executive of the Australian Competition and Consumer Commission, said more competition was needed to protect consumers.
Australia’s four biggest banks — ANZ Bank, Westpac, Commonwealth Bank of Australia and National Australia Bank — control more than 75 per cent of the domestic market. They enjoy lower funding costs than smaller competitors, due in part to an implicit government guarantee to save the banks if they get into trouble.
“Market economies only work properly if you have competition and we have to make sure there is more in banking,” Mr Sims told the Financial Times. “We have to fix the cosy oligopoly,” he said of the Big Four. “They have to feel under threat.”
Mr Sims said his office was investigating ways to strip away regulatory barriers faced by smaller financial institutions and would promote new “open banking” rules that would enable consumers to switch banks more easily.
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