31 May 2016
Sydney, 31 May 2016: The Australian Bankers’ Association has today strongly rejected the Greens’ proposal to break up Australia’s major banks and has called on the Australian Labor Party to do the same.
“Australia has some of the strongest banks in the world. Out of the top 100 banks globally, our major banks are in the small group of only 11 which have earned the high Standard & Poor’s rating of AA-,” ABA Chief Executive Steven Münchenberg said.
“This means that, even in times of global uncertainty and market volatility, Australia’s major banks are still able to raise the money needed from overseas investors to fund the Australian economy and meet the financial needs of businesses and households.
“This major economic advantage would be lost under the Greens’ policy, triggering an economic downturn,” he said.
“The Greens’ policy should be of grave concern to millions of bank customers, 143,000 bank employees, and the millions of Australian families who own the banks, either through shares or superannuation.”
The ABA has called on the ALP to explicitly rule out adopting the Greens’ policy.
“On a number of occasions, the ALP has said a royal commission would target vertically integrated banks, including Australia’s larger banks. Given the economic recklessness of the Greens’ policy, the Leader of the Opposition needs to specifically rule out following the Greens’ proposal to break up or restructure the major banks,” Mr Münchenberg said.
“The Greens’ policy is bad policy at any time, let alone when global markets and economic growth remain so uncertain.”
Banks in Australia have a range of structures and business models which add to the level of choice and competition in the sector. Larger banks offer a wide range of financial products and services including banking, investment, insurance and financial advice through the bank and bank owned businesses.
This service model can be referred to as ‘vertical integration’. It allows customers to meet all their financial needs through a single bank. Vertical integration is a common business model in advanced economies around the world, in large and smaller banks, financial institutions, and superannuation funds.
Alternatively, customers can choose from a range of other banks, credit unions, building societies and non-bank financial institutions to meet their needs.
Contact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913
The ABA has called upon Federal and State Australian governments to work together to combat the ongoing problem of elder financial abuse.