Australia: Watchdog says bank ‘oligopoly’ needs reform

Australia’s major banks are an “oligopoly” and must undertake reform to boost confidence in the financial system following a series of scandals that have fuelled calls for a sweeping judicial inquiry, the corporate regulator said on Friday.

“We’re in a market that is frankly an oligopoly,” Australian Securities and Investments Commission Chairman Greg Medcraft told a parliamentary hearing dominated by questions about how to improve policing of the finance sector.

“Work is needed to restore trust and confidence,” he said, while conceding that the banks had taken “important steps in the right direction”.

The firm language will be read as a warning to the “Big Four” banks – Commonwealth Bank of Australia, Australia and New Zealand Banking Group, Westpac Banking Corp and National Australia Bank – that regulators are watching how they respond to public anger over the perception that they abuse their market power.

The four lenders together control four-fifths of the industry in Australia and have enjoyed years of record profits thanks largely to their dominance of the mortgage market.

Full Content: Reuters

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.