The more debt the better ....

Just what Australia needs: more lenders, increased prices and more debt.

Morrison fails to realise that a correction is coming.

Treasurer Scott Morrison says bank plan will mean cheaper home loans

Renee Viellaris, Federal Political Editor, The Courier-Mail

July 16, 2017 10:30pm

Subscriber only

AUSTRALIANS are being promised cheaper home loans and bigger returns on savings under a federal Government plan to allow more lenders to call themselves a bank.

Treasurer Scott Morrison will today reveal he wants to dilute the power of the Big Four by removing laws that require lenders to have more than $50 million capital.

Mr Morrison said lenders faced a significant obstacle by not legally being able to call themselves banks.

His plan to inject more competition into the banking sector mirrors the UK where, after it was made easier for lenders to compete, 56 new banks entered the market.

Many were online lenders that could offer cut-price rates due to lower overheads.

“The Turnbull Government wants to bring greater competition to the banking sector,’’ Mr Morrison said. “Allowing more lenders to be called banks will mean better access to cheaper loans and more generous deposit rates.’’

Mr Morrison will today release draft legislation for public consultation.

He said restriction of the term “bank” could lead the public to mistakenly believe small banking businesses faced less regulatory scrutiny.

The Australian Prudential Regulation Authority will be given the discretion to allow a smaller lender, credit union or building society to call itself a bank.