15 January 2014
Louise Petschler might be in the business of representing the country’s smaller financial institutions, but she says the issue of what to do with those considered “too big to fail” should be the priority for the government’s inquiry into the financial system.
Ms Petschler, the chief executive of the Customer Owned Banking Association (COBA), which is the industry body for credit unions and building societies, says the dominance of the big four banks is a concentration risk for the financial system that needs to be resolved through government intervention to foster greater competition.
“No one wants to do anything that undermines the stability of the Australian banking system and we recognise that we have a very strong system,” Ms Petschler said. “Our argument is that with some rebalancing and with a recognition of the need for a greater diversity of players and with a regulatory system that encourages that, we can strengthen the stability of the system by reducing our reliance on these four too-big -to-fail institutions.
“The trajectory we are on now takes us to four too-big-to-fail institutions that continue to increase their too-big-to-fail status.”
Source: Too big to fail not going away, Jan 13, Financial Review
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