Australia: Regulator says banks need more competition

Australia’s competition regulator is going after the banking industry in the country, vowing to punish what it claims is misconduct, reported The Financial Times.

The report, citing Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC), reported that having more competition in the banking industry is the ideal way to fix the industry. According to the report, ANZ Bank, Westpac, Commonwealth Bank of Australia, and National Australia Bank have 75 percent market share in Australia and are able to access lower funding costs than their smaller rivals. That has created an unbalanced market in terms of competition in the country.

“Market economies only work properly if you have competition, and we have to make sure there is more in banking,” Sims told The Financial Times in the interview. “We have to fix the cozy oligopoly,” he said of the Big Four. “They have to feel under threat.”  The government official said the ACCC is looking at ways to remove regulatory barriers that hurt smaller banks and would push to promote opening banking rules that make it easier for consumers in Australia to easily switch banks. He noted that regulators shouldn’t have allowed Westpac to merge with St George Bank back in 2008, reported The Financial Times.

According to the report, the ACCC is working alongside other regulators to make sure the bank capitalization requirements benefit the four big banks and hurt the smaller banks in the country. The ACCC is als