Given that the banking reforms were supposed to create a 5th pillar by supporting the small lenders, the first impression is that they have done the opposite.

Any mortgage loan involves cost to establish, and instead of charging this up front, they have made this an exit fee that expires after a number of years over which the fee is recovered. Small lenders not having the branch network need to rely more on marketing and thus have higher loan establishment costs.

If these cannot be charged as exit fees, they then have to be charged up front, and the small lenders will be at a distinct disadvantage.

I know better.
Know I should skip past.
Even knew who it was in a Milli second.
Not sure Swan has it right.
But as I waddle of to cleaner air.
May I ask.
What is the oppositions alternative?
And are they displeased that government has tried to do some thing?
Now , I truly think room exists to, well question my mob.
On the silly, dumb populist policy of cash for clunkers.
It is both a rat bag idea and wasteful.
I however must say,this government, my team is blessed ,it is not doing very well, Gillard can not survive.
BUT thankfully Australia knows the opposition is far worse.
Turnbull concerns me, he is far better than some he has to work with and spells hard times for Labor if he stops the throwing of empty egg shells this mob thinks is a plan.
So long SM so long thread may visit not post here in this thread again.

I've been watching some of the banking inquiry on TV and its
highly amusing.

The elephant in the room is of course being ignored, ie its not
bank profits that are the problem, but too much borrowing for
overpriced houses and people maxing out their credit cards, because
they can.

Some facts being established:

Its not the big 4 charging huge exit fees, but smaller lenders.

Banks are far more competitive now, then 15 year ago.

Returns on shareholder equity have remained constant for years,
but during the GFC something like 2 million mums and dads put
their hands in their wallets, to prop up bank share capital.
In other words, increased profits come from increased capital
employed.

Competition for deposits has increased dramatically, so these
increased costs have to be passed on to borrowers.

The Greens have shown their ignorance about banking and finance,
with their calls for free ATMs for everyone.

Shadow minister,
You could not possibly for one moment have ever thought that the government or for that matter the opposition were really considering any changes to banking regulation that would in any way have an effect on the operation of the system as it stands. The oppositions ideas as good as they may have sounded were just that, opposition words. Easy banter as there is no chance of them seeing the light of day.
There is no real interest in altering a system that despite it having certain issues to do with cost is inherently stable and has just been a pillar of strength in a crisis with no bailouts or horrific losses.
The whole issue has been a smoke screen to appease the public that complain about relatively acceptable interest rates in a very stable and despite the doom sayers strong economy that returns good results quater after quater in a global environment that is fragile and unpredictable.
Be honest Shadow, had they done anything to truly discipline the banking system you would have been starting a thread condemning the government for interfering in the free trade of the financial sector.

Couldn't help yourself Belly.

All you need to do is look at Hockey's 9 point plan, which Swan obviously plagiarized parts from, and then added a few pet points that financiers etc had strongly advised against, such as the ban on exit fees (which Labor has been mistakenly pushing as a panacea.)

By not following sound advice Swan has actually achieved the opposite of what he intended by hurting the non bank lenders.

Nairbe,

There are actually things that the government could do to reduce interest rates and stimulate competition.

In many countries, the interest rate is in relation to the risk of the loan. For example, a person who is only borrowing 50% of the value of the property is a very low risk, as even if the property market crumbles, the loan will be covered. For these lenders the rate could easily be discounted by a few percent. On the other hand, those with 90% mortgages or in risky areas would pay a premium. But the average loan rate could reduce substantially.

However, the profiling would be politically unpalatable.