Summarised by Centrist
Political commentator Bryce Edwards writes that it was a night of celebration for the Big Four Australian banks. The New Zealand Commerce Commission’s final report on banking competition arrived with a whimper, leaving the status quo largely intact.
Despite identifying the sector as “uncompetitive,” the Commission proposed only minor tweaks, allowing the banks to continue raking in mega-profits—$7.21bn this year alone.
Edwards notes that the New Zealand Banking Association Chief Executive Roger Beaumont praised the report for its “well-informed and considered approach.”
ANZ CEO Antonia Watson was equally upbeat, according to Edwards, even suggesting that the government’s push for open banking aligns with the banks’ interests.
On the other hand, Finance Minister Nicola Willis decried the sector’s lack of competition, likening it to “a cosy pillow fight”.
Critics argue that the Commerce Commission has avoided any real confrontation with the powerful banking lobby. John Small, the Commission’s CEO, admitted as much, explaining that a structural breakup of the banks was “too big of a fight.”
The Commission also back-pedalled on earlier suggestions to loosen regulations for smaller banks, leaving the Big Four’s dominance unchecked.
The focus now shifts to open banking and KiwiBank as potential disruptors. But as Robert MacCulloch from Auckland University put it, “Every day Kiwis are ripped off by the Big Banks,” and without more drastic measures, that’s unlikely to change anytime soon.
