The Treasurer has asked the Standing Committee on Economics to inquire into and report on what is termed a Review of Australia’s Four Major Banks.

Hearings are commencing this week, in Canberra. The broad terms of reference are:

• domestic and international financial market developments as they relate to the Australian banking sector and how these are affecting Australia

• developments in prudential regulation, including capital requirements, and how these are affecting the policies of Australian banks

• the costs of funds, impacts on margins and the basis for bank pricing decisions, and

• how  individual banks and the banking industry as a whole  are responding to issues previously raised in Parliamentary and other inquiries, including through the Australian Bankers’ Association’s April 2016 six point plan to enhance consumer protections  and  in response to Government reforms and actions by regulators.

As to the latter, it will be interesting to know who is supposed to respond to “issues previously raised in Parliamentary and other inquiries” – the banks or the government.

The government may need to explain to the Committee as to its inattention to the gaps and weaknesses identified in what was a major government consultation paper in 2012, on the regulation of banks, insurers and others, on which the government sought, and received, many submissions as to needed reforms.  Those gaps and weaknesses remain. See my earlier comments.