Wayne Swan Rejects Idea Of “Peoples Bank”

Post by NeilMc on July 9, 2009 · Under Australian Economy, Business News, banking · Comment

Federal Treasurer, Wayne Swan, has stated that the Government has no intention of setting up a public bank which can effectively compete with the Big Four Banking Groups.

Last month a group of economists expressed their concern that competition in the Australian banking landscape had been eroded after the panic that gripped financial markets at the end of last year forced consolidation in the sector.

The economists in a letter to the government suggested that a possible solution to a lack of competition would be for the Government to establish a “people’s bank” which would be managed by the Future Fund.

The economists have called for the government to set up an urgent enquiry into the Australian banking sector.

Mr. Swan’s response to call has been that the Australian financial system not only continued to perform when the financial market crisis was at its zenith, but was in fact robust.

“We are always prepared to look at other arrangements that may be necessary if we deem that the level of competition is not sufficient. At the moment interest rates are at low levels. Certainly that is something that has added to the economic stimulus in the economy and certainly added to the disposable income available to many people who have mortgages.” he said.

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