Friday, 4 June 2010

As If The Big Four Were Not Enough

It almost makes me laugh in the midst of my rage.

Here I am, arguing that Australia needs a Ten Pillar Policy to bring back competition to the banking sector, and here are banking officials lobbying politicians to accept further mergers. And there are ministers who were "open to the idea". I want to know who these representatives of the people are so we can vote them out.

The arguments take my breath away.

One of the themes pushed was that a merged ANZ and NAB would promise to slash fees and charges across the board.

Yes, I totally reject the lessons of economics and therefore trust the big banks to cut fees and charges as they gain more negotiating power. Like they did during the financial crisis. (Another link here.)

The move, it was argued, would prompt CBA and Westpac to follow suit and deliver customers a major benefit.

A major benefit! Yes, why not have all four banks merge into one massive monopoly that can deliver a major benefit to customers right on their backside? They will be forever grateful.

I guess we dodged a bullet here, but we're all to blame for creating a tolerant climate where such ideas can be entertained. Corporates and politicians must learn that consumers are voters, and that they jealously guard their interests. But I don't see much hope that we can force a Ten Pillar Policy on the government with the citizenry sleeping so soundly.

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