The Turnbull Government has followed through on our commitment for the House of Representatives Standing Committee on Economics to call the banks to transparently account for their decision making and how they balance the needs of borrowers, savers, shareholders and the wider community.
Yesterday I wrote to the Chair of the House of Representatives Standing Committee on Economics, David Coleman MP to request that the Committee undertake an at least annual inquiry into:
- The performance and strength of Australia’s banking and financial system;
- How broader economic, financial, and regulatory developments are affecting that system; and
- How the major banks balance the needs of borrowers, savers, shareholders and the wider community.
The four major banks are to appear at least annually before the Committee and the Government expects that the Chief Executive Officers of the banks will themselves appear.
The Committee has been requested to focus on the four major banks’ perspectives on:
- Domestic and international financial market developments as they relate to the Australian banking sector;
- Developments in prudential regulation, including capital requirements, and how these are affecting the policies of Australian banks;
- The costs of funds, impacts on margins and the basis for bank pricing decisions; and
- How individual banks and the banking industry as a whole are responding to issues previously raised in Parliamentary and other inquiries, including through the Australian Bankers’ Association’s April 2016 six point plan to enhance consumer protections.
This at least annual process is the latest in the Government’s actions to strengthen our banking and financial system following the Financial System Inquiry, including the current review into external dispute resolution in the financial system and the Australian Small Business and Family Enterprise Ombudsman’s inquiry into small business lending practices.
The Turnbull Government is also implementing a $127.2 million reform package to better protect Australian consumers by strengthening the Australian Securities and Investments Commission (ASIC).
This new process represents an important opportunity for the banks to explain how they deal fairly with their customers and, in turn, build confidence in their institutions.
Banks operate under a social license and have responsibilities to the Australian public. We expect them to have high standards.
It is important Australians have confidence in their financial institutions. It is therefore critical that the major banks are regularly held accountable to all Australians through their Parliamentary representatives.
I thank Mr Coleman for the work he has been doing on establishing the committee and making sure that arrangements are in place for senior representatives of the big four banks to appear before the Parliament.