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FSU lobbies for ‘four pillar’ retention

The Finance Sector Union of Australia believes the Australian Government should continue to retain its ‘four pillar policy’ which currently bans any merger between the big four banks. 


The FSU argued in its submission to the Financial System Inquiry that a merger between two of any of the four major banks will remove an “effective and vigorous competitor from the market” when barriers to entry mean the emergence of a new competitor is unlikely. 

As a result, the FSU believe a merger will substantially reduce competition in markets for transaction accounts and competition within the banking sector as well as resulting in considerable employment loss.  

The FSU also noted in the submission that while there are “mechanisms to identify competitive and prudential problems with bank mergers, there is no mechanism to evaluate the impact of mergers on people, communities (particularly rural and regional communities) and society”. 

It recommended amending section 53 of the Trade Practices Act 1974 to include a public benefit assessment to evaluate the impact of the merger or acquisition through a ‘social audit’ in terms of the “concentration of economic power, employment levels, communities and access to services”.

This assessment, the FSU believes, should also include a period for public consultation and the “capacity to require the merger or acquisition parties binding undertakings to mitigate negative social impacts”. 

The FSU also argued for the “strengthening of compliance measures and monitoring of merger conditions imposed on merging parties”. 

 

 

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