Australian Banking Reform more tinkering than structural reform
There is one reform that gives the regulator more teeth and that is the ability to prosecute in the case of evidence of price signalling by the Four Pillars i.e. acting as a cartel, however how easy it will be to prove is highly questionable.
As reviews of regulation to improve competition in banking markets carry on across the globe, what are the lessons that those conducting those reviews can take from the Australian reforms?
Firstly for all the macho talk about breaking up the big banks, when the practicalities kick-in it is all a lot more complicated, expensive and difficult to do than say. Secondly, the focus should be more on helping the smaller players compete than punishing, and being seen to punish, the market leaders. Finally that market concentration does not mean a lack of competition, particularly when there is a similar level of scale amongst the big competitors.