Handicap banks to level out the field

by Richard Denniss in The Canberra Times
Originally published in The Canberra Times on May 4, 2010

The big banks now dominate the Australian financial system in the same way that the Melbourne Storm dominated the rugby league. They take the profits they made last year and they use them to fend off new competitors next year. They take the profits they earn in one part of their business and cross subsidise the prices they charge in the parts of the market where they are actually facing competition. Just as it isn’t ‘good for the game’ to see the same clubs always winning, it’s not good for customers or the economy to see a small number of banks rake in record profits year after year. It’s time our governments and regulators put some lead in the saddlebags of the big four banks. Nobody wants them to go broke, but everyone would be better off if there was a level playing field.

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