Bank profits

The RBA has taken a look at the health of our major banks and found them in good health. Indeed, it appears that interest rate margins are now higher than they were pre-crisis. I haven’t had a chance to look at the report in detail but this suggests that the government might safely move on issues of bank competition sooner rather than later. I had recently thought that issues such as bank switching costs might be left off the agenda given the economic turbulence. But the RBA report appears to suggest that there is little reason for cautious on a reform agenda. Indeed, surely it would be of concern to emerge from this crisis set back two decades in terms of effective competition.

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