Competitive and Sustainable Banking

8/8/2019 Competitive and Sustainable Banking

1/32

Competitive and

Sustainablebanking system


2/32


3/32

Competitive and

Sustainablebanking system


4/32

Co o l h of a r l 2010

isbn 978-0-642-74660-3

th or co r h . a r fro r d d r hCopyright Act 1968 , o r r rod c d roc ho r or r r o fro h Co o l h. R q d q r co c r

r rod c o d r h ho ld ddr d o h :

Co o l h Co r h ad r oa or -g r l D r3-5 n o l C rc

baRtOn aCt 2600

Or o d :h :// . . ov. /cc


5/32

1Overview

Co

Co v d s l b

bro d r for o ld o h r h of o r f c l

STREAM ONE: Empower consumers to get a better deal 6

b x f for ho lo 7

boo co r fl x l o r f r d o d or

i rod c d or f c h for ho lo c o r 10

e o r aCCC o v d ro c -co v r c ll

F - r c l l o o r d l for a r l h cr d c rd

L chBank on a Better Deal co r d d c o c 1

e l h forc h R rv b o o or d h c atm co o r

STREAM TWO: Support smaller lenders to compete with the big banks 16

b ld ll r h or h l c or

Co f r h F c l Cl sch r f r of o r f c l

i rod c h rd r ch of or for h Rmbs r 19

acc l r d v lo of ll Rmbs r for ll r l d r 2

STREAM THREE: Secure the long-term sa ety and sustainability o our fnancial system 22

allo a r l , cr d o d ld oc o cov r d o

D v lo d d l q d cor or o d r 24


6/32


7/32

3Overview

Co v d s l b

The Gillard Government will take urther action in three broad streams o re orm to empower consumers to get a better deal in the banking system, tosupport our smaller lenders so they can put more competitive pressure onthe big banks, and to secure the long-term sa ety and sustainability o the

inancial system so it can continue to provide reasonably priced credit toAustralian households and small businesses.

stReam One: empOweR COnsumeRs tO get a betteR DeaL Ban exit fees on new home loans o h l o f r h r r h x or x f r for xf o r h o ho lo fro 1 J l 2011.

Boost consumer flexibility to transfer deposits and mortgages o for r R rv b of a r l (Rba) gov r orb r Fr r o co d c co r h v f l d o ch olo c l o o , h o l l d r

l f ll cco r or l . F r h r h c h c c of a r l ho orro r o ov h r or cc l r h tr r

d v lo of o l fr or o r f r L d r mor i r c d rod c c r l r rfor or .

Introduce mandatory key facts sheet for new home loan customers d h l d r rov d o l orro r h l o - f c h ho ho ch h ll v r o h d ov r h l f of h r lo , d h r

c ho ro d o h c co r l d r d d . Empower Australian Competition and Consumer Commission (ACCC) to prosecute anti-competitive price signalling

l o r v fro -co v r c ll h d d o r rh o ld o h r .

Fast-track legislation to get a better deal for Australians with credit cards ld o o l r o l l dr for cr c do o f r r of cr d c rd hold r .

Launch community awareness and education campaign empowering consumers to Bank on a Better Deal o lc o ld d r d o h v orro r c l do h ro d o r d l.

Taskforce with RBA to monitor and enhance ATM competition reforms tr r o l h forc h h Rba o f r h r c o f r q r d o h c c rr r for o oo co o d r r c o atm f .

stReam twO: suppORt smaLLeR LenDeRs tO COmpete witH big banks Build a new pillar in the banking system by supporting the mutual sector h a r l pr d l R l o a hor

(apRa) ll q c l rov ov r 20 l o h r f h l , d r v d l h ch c rr l ro h r l fro l . p l d ll r h c r of hBank on a Better Deal c , cl d rod c off c l

gov r pro c d D o ol, d co h l l o d v lo r c r o r r d f Confirm Financial Claims Scheme as a permanent feature of financial system o r co d d o or c r d

c r h cr c l o rc of f d for ll r l d r o h l h ch r lo . Introduce a third tranche of support for the residential mortgage-backed securities (RMBS) market v f r h r

$4 ll o h h-q l , aaa-r d Rmbs o co or h v l f d r h ch o r ll r l d r rh v l o co v r r o h , o ld o h x $16 ll o v .

Accelerate development of bullet RMBS market for smaller lenders cc l r d of o ro r r c r forll r l d r c of ll Rmbs, o r h d d v r f h r f d , l r v o r d o l Rmb

stReam tHRee: seCuRe tHe LOng-teRm saFety anD sustainabiLity OF OuR FinanCiaL system Allow banks, credit unions and building societies to issue covered bonds d v r f d r h f d for o r f c l

o c r f d l h d c d o co , d h r o r o l r o vdo c ll f d or rod c v v o r co o .

Develop a deep and liquid corporate bond market l ch r d of Co o l h gov r s c r o c rxch , h tr r o l o f l r for o f r h r r d c r d oc d h cor or o d o

r l v or , o r d c o r r l c o off hor hol l f d o r o l v .


8/32

4 Competitive and Sustainable Banking System

The Gillard Government is introducing methodical re orms to give allAustralians a airer go in the banking system, and to build on the strength andstability our action secured during the global inancial crisis and the measuresweve already taken to promote competition.

bro d r for o ld o hr h of o r f c l

Co o h o r c o rco o lo r ov r . s ll r l d r c l

v l rol h c or h c cov oro l h h off r ch r

r r o lo . th r r o h o h r r r o orro r lo r

ov r o h h do lo c o r .

th gov r h lr d ro h r of r h h v cr c l oo co

h c or, cl d :

O r r , h ch or d d of d for ll r l d r d l d o - jor

o orro o $65 ll o hol lf d d r r od h lo l f d

r r v r l d loc d.

O r $16 ll o v h h-q l ,aaa-r d r d l or c d c r ,

h ch h cr c l or h orf d r h ch ll r l d rr l h v l o o ho lo d ll

lo . a o l co r cr d l for h f r

100 r for co r ro c o cro ll d rr or .

to h l o cr c do o f r orx f o r h c o r c l doh ro d d r d l ho o d

f r l f h l d r r r c d oc o co r cov r .

s ro r for o r d l for ll a r lh cr d c rd o h do c h o

or r h h h v o or c rrf h ho ld .

th gov r c d q c l d d c v l d r hlo l f c l cr rod c h ro c r a r l f c l d or cco cr d . w ho h c o , o r o ld h v l

l d r r for orro r o ld h v h h r. th o ld h v l d o lo r co o c ro h

d h h r lo a r l .

gov r or s v of h Rba d c o l ho h gov r d l c co f d c

h c r of h d h l d ol h co ld h v c ro h c lo

of co f d c h lo l f c l . thi r o l mo r F d d h Or ofor eco o c Co-o r o d D v lo l or co d h l of a r l f c l ,

c r d h gov r d c v c o .

Ho v r, a r l o fro h c of h lo l f c l cr d d h o r ll r l d r

r c l rl h rd, cr ch ll for co o . th gov r r c r d

h co v fo d o of o r c or r h co d l of o r ll r l d ro ho lo d ll lo , hlo l f c l cr d ch h rd r for h occ f d r o co o c r o co

h h .

th ch ll c olv d ov r h h r o lv r ll h r h g ll rd gov r ll

or h rd o or co o .th gov r ro l co d o h

or for f l , o h .


9/32

5Overview

th gov r o f l dr f l l o ,for rod c o rl x r, o l hprod c v Co o o- r r l h ch llo

h r hold r o ll co o rd f f l ol o h r co c r o r r o f r

r d o c .

th d c of h r ho c r x c d o od , d

ll cco d for h 2011-12 b d . thgov r f ll co d o r c f c l

r d r r h d o r l 2012-13,ll h d of jor dv c d co o .

F r h r for o o h gov r hr r of r for h c or, o h r hfor o o o or o co , r v l lwww.treasury.gov.au/banking or

[email protected] .

pro o or l v l l f ld for ll rfor l d r h do r hhold

x o oo h r c c o cc ch r f dfro ov r r .

s r h d o f d for ll r l d rd r l cor or o d c hro h

50 r c x d co h d o h f r$1,000 of r co .

m d d d r c d d cr d lrv c o r for c o r o ch

fro o o o o h r.

e l h d co r co l ho l(1300 300 630) f r co c o for co rco l o c rod c .

th co o r for co l hgov r c o o r fl c l coco c r o xc v c for CeO

r o h l o v h r hold r r o x c v l r d r ho l r

r l d o lo - r rfor c .

th gov r rod c d l l o l r o cr cdo o xc v old h d h o d r c or

d x c v , r r o fxc d o r v r l r r j c oh r hold r rov l, do fro h r v o hr hold

of v CeO l r r o .

i dd o , h F c l s l bo rd h lr ddor d a r l fr or for r f c lc or c do r rd r h v o r

h ch x hor - r rof h x of lo - r l .


10/32

e o r co ro r d l

STREAM ONE


11/32

7STREAM ONE: Empower consumers to get a better deal

asiC h lr d r l d r l h ch x lx c l ho ll forc h gov r x

o f r or co c o l x f , h ho r h for x f o lo co o1 J l 2011.

th r o o c h asiC ll h oco r f h r o rof fro x f or h oloc h r c o r for h o r h co

x r.

th f c r ll oo co o h ho lo r ov r , v c o rr r fr do o l do h ro d d

r d l f h r c rr off r h oco v r r .

th gov r ll rod c d oh n o l Cr d Cod o x f o h

p rl d r h f r of 2011, follor d co l o .

if o l r - d h r c rror x f fro r f or r cov rx f hro h o h r of f h a r l

s c r d i v Co o (asiC) hh o r o r h f r h h

f co c o l d r h gov r n o l Cr d Cod , h ch l o o h x d

or .

s v r l h v lr d r o d d d r c lo h gov r x r r ov

h r or x f , d h gov r llo l l o r h h f c o r rod c d, d h x f fro o h r l d r

r d.

th g ll rd gov r h co c r d for o h o r or x f o

loc c o r o h r ho lo . ex f (ofc ll d rl r o f ) c o h h h hco l l o h v fro ch o ch r or h o h r l d r.

th h o 1 J l 2010, h gov r rod c do h r for hro h h a r l Co r

L o r h h h d of a r l cr dr l or, asiC, o r ov r f r or

x f .

th r for r h asiC h h o r o c o f h ch r rl x

f h ch co d r d f r or co c o l o co r.

The Gillard Government will ban exit ees outright or new home loans rom1 July 2011, and has care ully and methodically designed changes to theNational Credit Code to build on our existing mortgage exit ee re orms.

b x f for ho lo


12/32


The Gillard Government will take important steps to progress the transitionto ull bank deposit portability. Portability would allow Australian consumersto quickly and seamlessly switch their deposit account and mortgage to acompetitor who is o ering a better deal.

boo co r fl x l o rd o d or

th l of co r o l do h ro d d r d l oo co v r r o h

h ch do off r co v dd h h h l v l of c o r rv c f c h r

of lo c o r .

th f l d mr Fr r ll volv x vco l o h h R rv b of a r l ,

h ch h r r r o l for h a r l , d ll x h r of

rro d cco r or l :

a h c rr ch olo c l l do l ro d or l .

pr rv h r l or r of for co r , cl d r v c of

for o .

th o l d for C r l acco R r oov r ll d l d cco for o ,

d r ro r rv o .

th f , co d r of rod c ccoor l o v r o l .

mr Fr r ll co l h o r f c l r l or ,h d r , ch c l x r d co r ro

d ll o h r r l v hold r , d r or oh gov r o h f d of h d

30 J 2011.

th gov r ll o for r R rv bof a r l gov r or b r Fr r o co d c

co r h v f l d o xh ch olo c l o o , h o l l

d roc for l f ll ccor or l .

b d o or l o ld co l h g ll rdgov r o h o or x ffor ho lo d r c o cco ch

c , h ch o r co r o h ho h h hr h h c l l do

h ro d d r d l.

m c o r hold h r v d occo h h h h v h r ho

lo , o h co v c of ov h r d occo l o c f c rr r o ovh r or .

D o cco r or l co ld l lrov d co r h r o l d, r f r lcco r o h ch ll h r d r c cr d d

d ch, d h ch ov h h h hch. i co ld o r co r o ch ro d

d h d l o h r v .

Co o h c or l r of h co o r q r h c o r l oov q c l , ch l d l co or .

b c rr l x lo h f c l d co hco r c r h h ch o f d

r r r c r h h h r h o h r

o ld .


13/32


th g ll rd gov r ll l o f r h r ooo h c c of a r l ho orro r or f r or cc l r d v lo of o l fr or o:

tr f r L d r mor i r c fro l d r ol d r o vo d co r lo h v l of h

r c h ch .

allo co r o vo d l d r f , ll or d ch r d r - l h co ,hro h h rod c o of c r l r o or o

hold ll or o h r f c oro ld o volv orro r d ch r d

r h r or .

th or ch r ho ld f r h rh l o co r co r o ch ho lo lo r h oc d co d co v c .

th gov r rod c d r c o ccoch c 2008 o r for

a r l o ch o r d l. D rh r l c of h lo l f c l cr

d r d l h v r o ld h v h d r f r c for h l of h r x o .

Ho v r, h cco ch c ll coo off r r of ch r c o ccoh l f ll cco r or l d v lo d.

th gov r x c h or co r lll h cco ch rv c co o

r r o h c or d h f of hc co or d l o .


14/32


i rod c d or f c hfor ho lo c o r

The Gillard Government will make it compulsory or all mortgage lenders toprovide potential borrowers with a simple, one-page key acts sheet whichuses standard de initions to show consumers how much they will pay everymonth and over the li e o their loan, and where they can shop around.

Co r ll l o co r h co df r of d ff r ho lo o -f c h fro d ff r l d r d d , dco r h v h co ld

or . a o l ho orro r co ld lco r h r l v co of or fro cr d

o .

th tr r h lr d d v lo d ro-for forh gov r f c h h ch h

r l d h h o c , o h ch h tr rll d r r d co l o h co r

ro d h d r , for r l x o r dr fl l o d r h f r of p rl 2011.

i ll d or for l d r o cl rl x l oo l ho lo c o r h v r h

o - f c h for h ( . . ov r hl f of o r lo , o ll r $x for v r $1 oh v orro d fro ). prov d h d clo r

dv c of h co r for ho loll v c o r h o or o ho ro d d

co r d l .wh co d r ho lo off r , or co rho lo , co r r c rr l f c d h l r

o of for o h h of f d d ff c lo d r d.

th v ll h c co r o r rov r r c d d rd r olo

rod c , o co r o rd r d d co r for o , d or

for d cho c d ro r rod c l c o .th gov r ll or h h d r o

co of co l c oc d h h r for .


15/32


The Government will bring in tough new laws to prevent banks rom engagingin anti-competitive price signalling that is designed to keep interest ratesor other ees higher than they would otherwise be, to build on our existingre orms to strengthen cartel laws.

e o r aCCC o v dro c -co v r c

ll

r c for o o co or for h r o ofll l co o .

i or l , h ro o d l ll cl r h co rc o d o h h h r l

r o , d o h rro d c rc c o h r o d for o .

For x l , h l d d ro o d o ldroh x c v fro r o f ll llo co or hro h h d or v

co h f o h r r h r orr ll follo h .

th or of co ld o d do o o h r do orr f o r o ror r h i o d rc o d o r c o r .

th gov r h r c v d d d l l dv ch co d r o ld o ro r o h

co c o of r c o h h v h ffor l l ff c of ll l co oo o d o h r o . s ch roh o o ld cr

l c r , c r r cco ld o o dv c ho h r co or llr c o h r l c , d h r for h h

ff c or l l ff c o ld .

F r h r, r v co c o o o h r r c o ld o c ll roh dd r h ro o d d , h or of r v

-off r v r l h r f l for co o .

For x l , h aCCC o ld l o c o f o ho o h r r v l o ll h

o l d or r r r .

th gov r h or h h aCCC cd-2010 o c r f ll d d o hTrade

Practices Act 1974 ( h ch fro 1 J r 2011 ll r d hCompetition and Consumer Act 2010 ).th r for ll c r -co v h v o r

c f c c or l h r h r rov d c h x , ho cr d d

co q c for o h r c or of o r co o .

th gov r ll rod c d o htr d pr c c ac h f r of h p rl

2011, follo r d co l o o x o rdr f l l o .

th l ll v h aCCC h o r o c o c f d c or l

ho l h r r c o h r co or ord r o d r co o . th o h

r for ll l ll o , h h c cfor o h r c or o c f d f r f r f r h rr v d d l d co d r o . Of co r , ll l cll d co ll l o f ll co l h h r

co o d clo r o l o .a -co v r c ll ch c ll f ll horof coll o c do o volv co

o c c r c j h r f lo co o r c c r l. L roh h

f c l or co c r d r c c lr d x hus, h uk d e ro d o h aCCC

o r ll clo h tr d pr c c ac , h ch d l o vo d h f ll c

of co o .

th gov r x o r dr f l l o v haCCC h o r o ro c h r co cl d h

h co c d r c o d o h r


16/32


br ch ll r c o h l of o$10 ll o , 10 r c of l r ov ror hr h f of h co d c h ch v r

h h r.

Of co r , l d c rc c h r r cll l l rov d ov r ll

l c f , h aCCC o ld l o rov d x o for h r d r h x

hor o rov o .


17/32


if h Joh o f l r l o $2,000 o rd h r cr d c rd

l c , o l d r o ld o h o off $2,000 of h d h ch o l co

1.9% r . th gov r ll l lo r h h l d r d h

$2,000 o do o of h d o h chr o d h ch h h r r of 19.9%,

v h Joh o f l ro d $360 r.

th gov r cr d c rd r for ll l o:

pr v l d r fro ch r ov r-l f lco r c f c ll r h h r cco c

o ov r h l .

b ol c d cr d l x o off r lr - r d o h co r.

e r ll r ch r r l d co ld r d r - r d d rd, cl d h

r r o ccr d o h l c .

m r l d r v co r or ov ro h r o cr d l .

m d or for cr d c rd l c o foro cl d cl r r of cco f r .

R q r l d r o for co r o hl c o of o l r

o o h r .

th o j c v h r cl r cr d c rd r h r r , co h rd for v r co r doll r,

d h l - ro c o o h l o a r lf ll o cr d c rd d r .

th gov r h ov rh l d o r co r l h o r . th co c of h

a r l Co r L r h f r 100 r h a r l h v h d for co rl cro ll d rr or h ch r h

ro c o for h cro v r c or of o rco o , cl d cr d . th n o l Cr d Cod

rod c d for h f r o l co rcr d l h o h ro c o for co r .

th gov r ll o f - r c r for hro hh n o l Cr d Cod o cr f r d

co c h f d r r ch r do cr d c rd , o v co r or ov r ho

h h r cr d c rd d o h l h rd r d h h r o.

th tr r ll o cc l r d r dco r co l o o llo h r l v l l v

d o rod c d h f r of p rl 2011.

For r of h gov r o l cr dr , h o h l ll v a r lc rdhold r o forc cr d c rd l d r o

lloc r o h h r r d f r :

For x l , h Joh o f l h v cr d c rd l c of $5,000, co of $2,500 l c r f r fro r v o l d ro h ch h r o r c lr of 1.9% r , d o h r $2,500 h ch

h h v cr d c rd fro h r l d r o h ch h r r

19.9% r .

The Gillard Government will build on its new national responsible lendingre orms by ast-tracking our election commitment to crack down on un airtreatment o Australians with credit cards to give consumers more controlover the amount they borrow and stamp out lender practices which currentlysee them pay more interest than they should.

F - r c l l o o d l for a r l h cr d c


18/32


w ll o r l cr d o d ld oc ,o h r h o r r o l d o h r ll r , r h

h c r of h r c , o ro rlfor co r o h f d co v

l r v h off r o h . th ll cl dh rod c o of gov r pro c d

D o ol, h ch ll h l co r ld f h h r d o r c r .

th g ll rd gov r co d o ld hc c of v r a r l o r d c o

o h r o d o h l h c h rf c l ll .

i rov d f c l l r c c cr co o cr c o d dr v co o h f c lrv c c or, r of h gov r ro d r

d o fo r co v , ff c , ll- for dd f r .

th gov r ll l o l ch , r c vco r h asiC o h l o l oo h r

d r d of o r hro h cc oh h-q l d d d o l , r o l df c l d c h fr d r d l cc l .

th r for co l h g ll rd gov r x co o r a r l d

h v h ll d o l d h d o for dco r d r o l f c l d c o .

Fro 2011, h o l chool c rr c l for m h llco ro foc o h r c c l f c l ll

h d d, h dd o l r rov d dfor ch r .

The Gillard Government will launch a community awareness and educationcampaign in early 2011 aimed at building understanding about the range o competitive deals on o er and empowering consumers to shop around.

L chBank on a Better Deal o l co r

d c o c


19/32


aro d o- h rd of atm r c o o do c r f , d rl ll c rdhold r h v cc o

or of l 1,500 atm o h ch h do o f . i dd o , h r of atm h cr d

ro d 1,500, cl d r r l, r o l dr o r .

th jo tr r / R rv b t forc ll r oro h gov r J 2011 o h d for

f r h r c o , h rl r or F r r 2011 oro r c o for d l h c f c ll

ff c a r l d o d o h r r oco .

O 3 m rch 2009, h Rba d h atm d rrod c d c of r for d d o rov

r r c , fl x l , ff c c d co o h a r l atm . k l of h

r for cl d d:

a ol h l r l rch f d d o h r f c l o o ch o h r for h

rov o of atm rv c . th rch fr r r l r o d, r c d d o r fl c co ,d ov r rch f co ld h v r l d d r rov o of atm , r c l rl h h co

loc o r r l, r o l d r o r .

allo atm o r o ch r c rdhold r d r c l ,f c l cr h r r c of atm f

( h ch r d clo d o h c rdhold r r or oh r r c o f l d).

s c o co ch r d o rh o co c o h atm .

th r for h v lr d ro l co r da r l o ch h r h v o r d ch o

atm h ch do ch r f , h atm f d c rdhold r r d c d $120 ll o h f r

r c h r for r rod c d.

The Gillard Government will take urther action, i required, to enhance thecurrent implementation o re orms to boost competition and transparencyon ATM ees, and will instruct the Treasury to establish a task orce with theReserve Bank to monitor the ATM industry.

e l h forc h R rvb o o or d h c atm

co o r for


20/32

s or ll rl d r o coh h

STREAM TWO


21/32


22/32


The Gillard Government will con irm the Financial Claims Scheme as apermanent eature o our inancial system. Deposits covered under theFinancial Claims Scheme are a critical source o unding or our regional banks,credit unions and building societies, making this an important measure tosupport the capacity o these smaller lenders to access unds or cheaper loansto compete with the big banks.

Co f r h F c l Cl sch r f r of o r f c l

th F c l Cl sch d v lo d ov r hr od l d o h lo l f c l cr h

Co c l of F c l R l or , ho r cl dh gov r or of h R rv b , h s cr r o h

tr r , d h Ch r of o h apRa d asiC.

th d c o o rod c h F c l Cl sch ll for h cr , cc l r d o

c r co f d c h a r l f c l follo h coll of L h bro h r .

a r l r ll c l d d h v f dfro r of o h rv o o r orld-clf c l r l or . O r r o dl d

r o l d rd , h v d v lo d roo l c l r of r o l l d d r

.

b a r l o fro h rofo d lo of co f d c h occ rr d ro d h orld d r hd h of h lo l f c l cr , h d o or e ro d h u d s c co c r d o

h f of h r d o .

to r v l r o occ rr a r l ,h gov r q c l d d c v l rod c dh F c l Cl sch o rov d c r o

a r l d o or hro h fr r for h rd o of o $1 ll o .

th gov r h or h h Co c l of F c l R l or o r v h c rr $1 ll oc , o h ch cov r c rr l fr , o d r

ro r l v l h ch h c ll froOc o r 2011.


23/32

19STREAM TWO: Support smaller lenders to compete with the big banks

r c , r co d o r fr l forc r o . th tr r d aOFm dv h

h dd o l or , h Rmbs r o ld x c d o rov f r h r fro c rr l v l d

co v or co v f d o rc forll r l d r .

th lo l f c l cr l d o rofo d d loc o lo l c l r , cl d h r for Rmbs

i h o d c d for h cr , c of Rmbs o r ll r l d r o of h dr v r of

co o h a r l or r , lr c l rl o r r o l , hol l or

l d r d l cr d o d ld oco r cr c l f d o l d o o f l .

s c ll o r orro h rr d l ro r , h Rmbs r l o v l

or l d o o 2.4 ll o ll cro a r l .

D h c r d a r l l d r c d v r f lo , v or lo ll

lo co f d c h Rmbs r , l r l d o r d c o l q d d co o ff c fro hv r oor cr d q l of - r lo d

o c h c r h u d s .

th v l f d r ff c v l h for of o r ll r l d r , h co ld orrof d o l d o f l for ho lo d o ll

.

i Oc o r 2008, h gov r ov d o or hcr c l f d r , d r c h aOFm o v$8 ll o h h-q l , aaa-r d Rmbs d

ll r a r l l d r r of h gov r

th a r l Off c of F c l m (aOFm)d h tr r dv h h d r c v

Rmbs or ro r o or h r hrod c ov r r of Rmbs, c

v or lr d d r d h a r l Rmbsr of v r h h cr d q l . th R rv b of

a r l h l o co f r d d r c v orro r h ov r r .

th gov r $16 ll o Rmbs vco o do rd r r o orro cofor ho hold d ll . O r v h l h Rmbs r co ch r, orco v o rc of f d for ll r l d r .

i v r v v or h co f d c o vcr o of h r o o h

or r , d h l ll r l d r oco l d co v r r d

or r h r h o ld o h r o l .

s ll l d r ResimaC d h or for h Rmbsr h v l o r co l flo

of f c o h ll co , dh ho ch or , h r o ld l r llho d of a r l ll o r hoo ld h v d r v d cc o f c ll r , v r , dr cl r d r r .

th aOFm h clo o 10 r c of f d lr d v d fro h gov r co d$8 ll o or r ch h v l o a r l

ll .

th aOFm h dv d h x c h hgov r co d $8 ll o r ch ll f ll

v d rl 2011 d h d rov

The Gillard Government will invest a urther $4 billion in high-quality,AAA-rated RMBS to continue to support this vital unding market which oursmaller lenders rely on heavily to put competitive pressure on the big banks.This will include the continued additional objective o supporting lending tosmall business, and will not be available to support the major banks.

i rod c h rd r ch of ofor h Rmbs r


24/32


th aOFm d h tr r ll co o clo lo or co d o h Rmbs r o d rf h r h rd $4 ll o r ch of or for h

r r q r d.

co o ro d ff c v co o o ror r .

w h h r ll d loc d nov r 2009, df r v r ro r l fro h l r ch , h

tr r r d r c d h aOFm o v o h r $8 ll oo co h gov r or r or forh Rmbs r , h h h dd o l o j c v

of or ll l d .

ev r doll r of h $16 ll o v ll o oh l o r r o l , cr d o , ld

oc d hol l l d r o o doll r ll oo h .

th coll of h Rmbs r d d dr cov r o f c ch ll for f d of

ll r or l d r a r l . a r l lRmbs c h dro d fro ov r $68.4 ll o 2006 o o l $14.2 ll o 2009 d $15.6 ll o 2010 ( o 31 a 2010). a f c r of h Rmbs d h d d o aOFm or .

Fro nov r 2008 o rl D c r 2010, of h$34.3 ll o Rmbs d a r l , $26.2 ll o(76 r c ) r d l o or d aOFm d$12 ll o (35 r c ) c ll rch d

h aOFm. th d d Rmbs r f c orr v h ll r d o - l d r fro

co h off r ch rho lo d ll lo .

th gov r or for h Rmbs r h ol l v l o ll r l d r

flo , d llo ll r l d r o col d ch r r o or co v

r r o h .


25/32

21STREAM TWO: Support smaller lenders to compete with the big banks

Rmbs c r or , h h r c l r d ro r v l ov r h l f of h c r o

h r .

Ho v r, h l h r l o l or ch h ch occ r for x l , f

h h v o v or h r r c l c for d rl lo r r d o ll r l d r r

l l o or h co . b or ovr c r l h b d o d ad l d b

r c o , h ch co r d ro d 50 r c llc r , h gov r f c l v

h cl .

th tr r d aOFm ll co or h o rf c l r l or o d v lo h r for ll rl d r ll Rmbs, cl d or h r r q r dfro h gov r $4 ll o r ch of

v h Rmbs r .

th gov r h lr d f c l d h f r llRmbs c ll r l d r o h l co

h h . th aOFm r c l o c d or for h c of Rmbs r c o

b d o d ad l d b , h ch cl d f cll r ch .

th r c o r r d or l o h d v lo of h ll Rmbs r for

a r l ll r l d r , h l o rov d h hch r f d o h c off r or co vho lo d ll lo .

a h tr r or h aOFm h ro r d,v r l o h r f c l o h v x r d

r h ll r c r o r f d .a r c Co o l h b c cl d d $210 ll o ll r ch . th cc of h d lf r h r d o r h v l of h ll Rmbsco c , h or ll c x c d ov r hco o h .

b ll c c r c r d o l l forcl o c r o d r d c , ch

h ubs Co o bo d i d x. m o lv or , ho v o h lf of a r l

r o f d , r r q r d o r l c orv h c r co d h d c . th

dd o l r c r l d d d d v r f c o of v or h h o l o Rmbs or r l ld co ff c v .

th f r of ll Rmbs h h rov d

v or h r l r r ov r h l f of h c r , h f ll r of h r r c l l l o r . i co r , r d o l

The Government will task the Treasury to accelerate its work on designing themost appropriate structure or smaller lender issuance o bullet RMBS, as analternative to traditional RMBS. The Treasury has been actively working withAOFM or some time to develop this market or smaller lenders to strengthenand diversi y their unding.

acc l r d v lo of llRmbs r for ll r l d r


26/32

s c r h lo - rf d lof o r f c l

STREAM THREE


27/32

23STREAM THREE: Secure the long-term sustainability o our fnancial system

do o r cov r x r f d f ll. th a r l x r ll co o f ll ro c d

th tr r ll l o co l o h ro r l v l of c o l c d o cov r d o d c for d v d l

o , for x l f v rc of r oa r l . th ll r l ff rof o cov r d o or cl , x r l

l l h l v d r h F c l Cl scho ld v r d d.

th gov r r h h r h lr d r c l x l of h cc f l c of cov r d

o d a r l ov r r, d h ov r j r d c o cl d e ro , C d ,n Z l d d h u d s lr d llocov r d o d c .

i d r co l o o d h v d c d hh l o cov r d o d ll r h h

c c of ll a r l jor d r o l ,cr d o d ld oc o co

rov d r o l r c d cr d o a r lho hold d ll h d c d

o co .

a d d l q d cov r d o d r ll h l och l a r l o l r o v

hro h h f c l o rod c v v ll c or of o r co o .

th gov r h c r f ll d hod c ll co l c rl 2010 h o r f c l

r l or , ll d r d r hold r ,o l r v fr or for h rod c o of cov r d o d a r l , o r h d d v r fo r f c l cc o ch r, or l

d lo r d r o f d do c d off horhol l c l r .

th gov r ll r l dr f d oh b ac d r h f r of p rl

2011, follo r d co l o o h rh o r f c l r l or , o d l of l l v

fr or h ch x h f for o hl cc o f d d co o h

c or.

th f r fr or rod c d h gov r forh c of cov r d o d ll r h c r

of a r l d o or v d ro c o of x r f d .

a r l d o or ll co o h v olc r ov r h r d o d r h F c l Clsch , h ch r f r of a r l

l d c .

th F c l Cl sch l o llo hgov r o l v h d r o r cov r

x r o d o d o or cl h v rl l v o f l d ll

The Government will amend theBanking Act 1959 to allow Australianbanks, credit unions and building societies to issue covered bonds, to securethe long-term sa ety and sustainability o our inancial system so it cancontinue to provide reasonably priced credit to Australian households andsmall businesses.

allo a r l , cr d d ld oc o

cov r d o d


28/32


v r h h l v l of ro c o for v or , ll r d c d r c o co for r .

i h 2010-11 b d , h gov r o c dl r o r l d clo r for

orro fro r l v or .

th gov r l o rov d d x c v oro o r o l v , co r a r l o

co d r v rod c l cor or o d o d v r f h r v .

th tr r ll l o f l r for o f r h rr d c h o of r d oc d h cor or o d o r l v or , cl d f r h r

r l d clo r r q r d ro cl l r l o .

a v r cor or o d r cr c l o co v r r o l d r o ,

d o h r o r o l r ov o c do c ll f d or rod c vv o r co o , v o h h d h cor or c or, r d c o r r l c o

off hor hol l f d r .

allo Cgs o r d o c r xch llrov d r l v or h or v l r c

ch r for v h h o cor or o d d a r l , ll h l f r h r co r r l v or o

co d r d v r f h r v hro h v f x d- co rod c l ov r d

cor or o d .

Co h h gov r d o ro oco o f c l r o r a r l , h tr r ll r or o h gov r o

h co d l of l r v r xcho h ch Cgs co ld r d 1 J r 2011.

th tr r ll l o f l or o ld o hr co d o of h a r l F c l C rFor d r or c 1 J r 2011 o h o

ro r d of r for o r l d clo r

for r l cor or o d h h roc lr dllo d for h r l off r , h ch rov d

The Gillard Government will acilitate the trading o CommonwealthGovernment Securities (CGS) on a securities exchange in Australia, as part o its broad agenda to oster a deep and liquid corporate bond market, promoteAustralia as a leading inancial services hub and boost our reputation as one o the most attractive investment destinations in the world.

D v lo d d l q d cor oro d r


29/32


30/32


31/32


32/32

Documents

Competitive and Sustainable Banking