Monday, December 13, 2010
Former Reserve Bank and Treasury chief Bernie Fraser will meet with the big four and also consumer organisations and building societies and credit unions in order to work out whether it is possible to make account numbers fully portable between institutions.
Speaking to the Herald from his farm near Canberra he said it was clear there was a problem.
"In every survey that's been done where people are ask what they think of their banks, around 70 per cent say they don't like their bank or are unhappy - but they don't move. Inertia is a very powerful force."
Coming to the job without knowledge of the technical problems that might prevent account number portability Mr Fraser said would act like a management consultant, "a fresh pair of eyes" able to get answers out of the banks.
"I have experience talking to the heads of the banks as Reserve Bank governor, although I had a big stick though in those days, I used to regulate them... It meant I could talk softly and they would listen."
"These days they seem aggressive in defending their self interest, which is fine up to a point."
Asked if he would be to get to the truth Mr Fraser said he had been doing it for 40 years.
"I have always been questioning of things that have been put to me, probing and wanting to be satisfied of even quite simple things, much to the dissatisfaction of some of my colleagues on occasion."
"I think it helps to cut through the bullshit sometimes.
Although on the board of Members Equity Bank, one of the institutions that would benefit from account number portability, he said he did not see a conflict of interest.
"In most things these days there is that perception if anyone has an involvement in something that is in someway embraced in an inquiry. But these things can be managed if the people involved have reasonable integrity, and I would hope I could still claim to have that."
While welcoming the inquiry consumer organisation Choice said it should not hold up more immediate steps to make bank switching easy.
"Consumers wanting to move to a new bank should only have to sign a single form at their new bank that guarantees the speedy transfer of all their direct debits and credits from their old bank," said Choice better banking campaign director, Richard Lloyd.
"We want the banks to take the hassle out of switching now."
"Some say the banks won't listen. We need to see leadership from the banks themselves."
University of NSW competition expert Frank Zumbo said the inquiry would develop proposals that might take years to implement or might never see the light of day.
"We don't have key details and we don't have clear timelines," he said. "In the meantime the big four banks can extend their dominance."
The head of the National Australia Bank Cameron Clyne will appear before the Senate banking inquiry in Sydney today along with representatives from the Treasury and Reserve Bank. The heads of the Commonwealth and ANZ banks will appear on Wednesday.
Published in today's SMH
. Bernie Fraser regrets
. Fraser: "no reason why we should contemplate a downturn"
. Keating - Fraser betrayed me