Vertical integration placed under PC microscope
The Government has moved to place vertical integration in the financial services industry via a new inquiry reference to the Productivity Commission (PC).
The move was announced today, little more than 24 hours before the Federal Budget, with the Treasurer, Scott Morrison, saying he had tasked the PC to hold an inquiry into competition in Australia’s financial system consistent with the Government’s response to the Financial System Inquiry (FSI).
The Government announcement has been welcomed by the Australian Bankers Association (ABA) which said it was pleasing the inquiry would look at all parts of the financial services industry.
Morrison said the PC would look at how to improve consumer outcomes, the productivity and international competitiveness of the financial system and economy more broadly, and support financial system innovation, while balancing financial stability objectives.
The Treasurer said that, in doing so, the PC would consider the level of contestability and concentration in key segments of the financial system, including the degree of vertical and horizontal integration.
It will also examine competition in the provision of personal deposit accounts and mortgages and services and finance to small and medium businesses.
The Inquiry will commence on 1 July 2017 and is due to report to the Government by 1 July 2018.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
