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Unlike America, Australia is overbanked. Nicholas Eckhart/Flickr

Murray inquiry not made for a future with fewer banks

A key component of the Financial System Inquiry handed to Treasurer Joe Hockey this week was that “the financial system should be subject and responsive to market forces, including competition”. But on…
Trading floors like this one – at the old American Stock Exchange in the 1980s – are at the heart of capitalism and financial speculation. David Foster/Flickr via CC BY-ND

Financial speculation: the good, the bad and the parasitic

The word “speculation” carries a connotation of negativity. And it’s probably fair to say that pretty much every financial crisis since the tulip mania of the 1630s can be attributed to some sort of mass…
Australia’s massive superannuation sector is costly compared with its global counterparts. Joel Carrett/AAP

Financial system inquiry sets sights on super: experts react

Australia’s financial system is competitive and well regulated, but more work is required to boost superannuation competition, according to the interim report of the Financial System Inquiry, led by former…
Conflicts abound in Australia’s financial system. Dan Peled/AAP

Three financial system flaws David Murray can’t ignore

At the current frequency of financial system inquiries (Campbell 1982, Wallis 1997, Murray 2014) there will not be another until 2030. That makes this week’s interim report from David Murray all the more…
The spotlight is on the David Murray’s Financial System inquiry following a report critical of the Commonwealth Bank and Australia’s corporate regulator. AAP/Joel Carrett

No Royal Commission; but banks not too big to be held to account

The Senate inquiry in the actions of the Commonwealth Bank and the Australian Securities and Investment Commission has drawn a line in the sand, holding the banks and financial advisers to account for…
Further global deregulation of banking might present future opportunities. Image sourced from www.shutterstock.com

Why we needn’t fear the end of the Four Pillars policy

Revelations by whistleblower organisation Wikileaks of secret global negotiations to further deregulate global financial services, has led to speculation that such pact could signal the end of Australia’s…
An increasing number of consumers choose a broker over going direct to a bank for their home loan. Dan Peled/AAP

Looking for a home loan? Choose from one of these four options…

Over 40% of mortgages in Australia are sold by mortgage brokers, not by their manufacturers - an issue that has the CEO of Australia’s fifth largest bank, Suncorp, arguing the sector is skewed towards…
US bankers like JPMorgan’s Jamie Dimon fear increased bank regulation. Chuck Hagel/Flickr

Time for bankers to have a capital rethink

A plan by US regulators to impose greater capital requirements on the nation’s eight biggest banks has prompted complaints it will put the banks at a global disadvantage. The proposal is that the banks…
Recent regulator thinking on the financial system has been to favour stability over competition. thehutch/Flickr

From crisis to cosy: why banking needs another inquiry

Reporting season has delivered another round of record bank profits. Yet, in itself, this is no bad thing. Former Reserve Bank governor, the late Sir Harold Knight, used to quip that profitable banks don’t…
Coles is believed to have applied for an Authorised Deposit-taking Institution licence, which would allow it to take deposits. AAP

Mortgage price check in aisle four as Coles banks on future

The news that Coles may be seeking a banking licence would, if confirmed, put the supermarket group and its parent company Wesfarmers in direct competition with Australia’s major banks. It would allow…
Australia enjoys a privileged relationship with most economies in the Asian region because of the integrated global value chain. Image sourced from www.shutterstock.com

Increasing Australia’s edge through Asian value chains

Australia is facing increasingly stiff competition from developed economies all vying for a share of the growth pie in the East and South Asian region, where Australia has integrated its value chain activities…
A former mortgage broker - who is now facing fraud charges - has blown the whistle on predatory lending practices in Australia’s financial services industry. Image from www.shutterstock.com

There are predators in our own backyard, but where are our financial watchdogs?

The level of sub-prime mortgages in Australia may be far in advance of what was previously assumed and provided for by banks. The story was broken on the ABC, and covered elsewhere. The revelations centred…
To ensure a sound financial system, policymakers should balance the twin objectives of stability and competition.

Is competition crucial to the health of the financial sector? You can bank on it

Reactions to my call this week for another inquiry into Australia’s financial system have been mixed. Most commentators seem to accept that there’s logic in having another inquiry, even if some think that…
Banks behaving badly: ensuring banks' sustainability reports are accurate and credible will go some way in restoring public confidence. AAP

To be good corporate citizens, banks must improve their sustainability reporting

“Events over the past couple of years have raised profound questions about the ways in which banks and businesses contribute to society. For both to play their full part, they must restore trust and become…
HSBC chief executive officer Irene Dorner testifies before the US Senate about allegations of money laundering within HSBC. AAP

HSBC’s money laundering scandal is more than just risky business practice

Recent news that HSBC executives admitted to allowing Iran, terrorists and drug dealers to launder nearly USD$16 billion over a six-year period would make earth underneath you shake. How is that the bank’s…

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