David Riichardson
(Episode 452; 13 minutes 42) Australia has some of the most efficient banks in the world. That’s a view often expressed as a reason for the country avoiding the worst of the financial crisis. The banks didn’t resort to giving risky loans because of safe, rational business practices.
There’s another view, proffered by David Richardson, a research fellow at the Australia Institute, that the major banks in Australia would have behaved with the same excesses as some of their overseas counterparts if it wasn’t for the regulatory regime imposed on the industry. He argues that even more control is needed to hone-in excessive bank profiteering in an industry whose economies of scale are preventing new entrants emerging to challenge the current Big Four.
Read more in David Richardson’s paper “A licence to print money: bank profits in Australia“.
Tell us what you think? Are the banks making too much money? Should the government introduce more regulation to control the profit-taking of the major banks? Let us have your thoughts in the comments section at the end of this post.
