CTU media release
21 July 2009

CTU welcomes bank inquiry

The Council of Trade Unions has welcomed the announcement of an inquiry into bank profits. “It is a constructive initiative. The CTU intends to contribute to this inquiry and we hope that all political parties will support it,” said CTU Economist and Policy Director Bill Rosenberg.

“We were disappointed that the Select Committee inquiry did not proceed. We have already expressed our concern that interest rates are too high due to larger than justifiable margins among the big four Australian owned banks. These banks have been over reliant on foreign borrowing which has contributed to the current account deficit and the high and volatile exchange rate, all of which leaves the Reserve Bank’s actions relatively impotent in good times and bad.”

Rosenberg added that the inquiry could usefully look at not only whether bank margins and profits are too high, but also whether they are too reliant on overseas and short term borrowing, whether their lending is making sufficient contribution to stimulating the economy during this recession, and options for resolving these matters. There is also the issue of tax avoidance and how this may be affecting banks’contribution to the economy.

ENDS

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