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Australia: New law will stifle bank competition

 |  October 2, 2016

Changes to competition law being introduced by the Turnbull government will crimp the development of new products and services by banks is the opinion of one expert.

Rather than driving greater competition, the “effects test” will discourage innovation and lead to homogenous product offerings that carry no risk of falling foul of misuse-of-market-power laws, according to University of NSW business school lecturer Rob Nicholls.

Dr Nicholls was the chief investigator for a probe into financial services competition by the Centre for International Finance and Regulation, a project spurred by the Financial System Inquiry and Harper competition review.

His comments come ahead of the appearance of the chief executives of the big four bank sbefore a parliamentary inquiry. Concentration of market power will be a key theme of questioning by members of the House of Representatives standing committee on economics.

Full Content: Australian Financial Review

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