FAIRNESS OF BANK/CUSTOMER RELATIONSHIPS
I carried out research for the Council of Small Businesses paper presented to the Senate Economics Committee’s Inquiry Into Banking Competition in December 2010. The Senate published the paper.
The paper draws attention to matters inhibiting competition and independence by the subscribing banks when providing services to customers based on practices set out in their contract titled the Code of Banking Practice.
The sixteen banks state the Code is a contract between banks and individual and small business customers. The problematic manner they applied the Code should concern everyone.
The research noted:
The Code allows sixteen banks to act as a cartel with practices governed by a few ambitious and possibly dishonest bankers.
This is anti-competitive as banks promote practices, including unquestioning compliance with the Code, without competing with safeguards and warranties, and other customer benefits.
The subscribing banks have engineered monitoring and review practices that protect their own interests. They act as a cartel in which their collegiate position is presented to their customers rather than regulators ensuring each subscribing bank competes with superior, transparent principles.