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.