Westpac Chief Says Global Investors Concerned Over Australian Banking Reform Proposals
Gail Kelly, chief executive of Australian banking major Westpac says that international investors are closely watching the political and regulatory developments of the Australian banking sector.
Mrs. Kelly made her comments whilst submitting a 46 page report to the Senate economics committee inquiry. Mrs. Kelly said her comments were driven by a recent investor road show she undertook to London, Boston and New York, in which a large part of her presentations were consumed by regulatory and political issues.
“Overseas investors are aware that we’ve come through the crisis well, but there is a concern that something might be done that harms that.” Mrs. Kelly said.
In its submission to the Senate inquiry Westpac argues that competition within the Australian banking industry is intense, particularly for deposits, and the real issue facing the industry is cheaper access to funding.
Westpac rejected the need for a new inquiry into banking industry, arguing that another was not required for at least another three to four years, whilst banks implemented existing global banking reforms.
Westpac suggested the adoption of four measures which would improve the ability of banks to raise funding. Westpac wants equitable tax treatment for bank deposits, which should be similar to the treatment for other forms of savings. The lender wants regulation to be loosened to allow lenders to issue covered bonds. It also says the RMBS market needs to be expanded and to include the securitisation of alternative asset classes.
Mrs. Kelly would not comment on suggestions for the creation of a fifth banking pillar, that would offer more effective competition to the major banking groups.
“We’re hopeful the package will come out soon, but we welcome a strongly competitive environment, including credit unions and building societies,” she said.
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