Newly appointed Deputy Prime Minister Wayne Swan has a vital opportunity to press for banking reforms at the G20 Summit in Toronto this weekend. Australians have been advocating for banking reform and responsible lending that cements precautions against the international repercussions of the GFC.

The Finance Sector Union’s Charter for Better Banking, which has high levels of support from the Australian community, outlines reforms that the Australian Government could adopt right now, in line with international discussions and policy developments to make banking better.

The FSU’s National Secretary Leon Carter said whilst the financial toll of the GFC was greater on other countries in comparison to Australia because of the swift action of the Labor Government to secure jobs and stimulate the economy, there is no excuse not to protect against the risky practices that caused the crisis in the first place.

“From our extensive research with the community, we found that 77 per cent agreed that even if Australia’s banks did well during the global financial crisis, Australia is part of the world economy and we should be advocating for new, global rules to prevent high-risk banking activities.

“Australia needs to be setting the pace around our own protective measures. The International Financial Stability Board is currently reviewing banking reforms similar to those that the US is implementing. We led the world in responding to the GFC and we can again when it comes to better banking.

The FSU calls on the Federal Government to act to reform the banking sector and ensure that we are at the helm of international response to financial reform.

The Better Banking Charter outlines four key areas in need of reform:

• Debt: Government regulation to prohibit or significantly limit the extent to which performance can be measured by sales targets that are linked to selling debt products in the finance sector.
• Rates and Fees: Government regulation to require banks to justify interest rate movements beyond the Reserve Bank and Regulatory requirement for banks to demonstrate a direct link between their fees and charges and customer service provision.
• Offshoring: Commitment from Government and banks to stop offshoring jobs and invest in developing skills in the Australian financial sector. Enacting consumer right to know legislation.
• Community Expectations: Government regulation to prohibit the short-term, bonus culture that provides massive rewards for risky short-term behaviour by executives in the finance sector. Regulatory requirement for banks to demonstrate a direct link between their fees and charges and customer service provision. Legislative provisions that require demonstration of the public benefit of mergers between finance companies before they are allowed to proceed.

“The International community is behind banking reform after the severe fallout from the GFC and we know Australians are behind banking reform. We need the Federal Government to again step up at the G20 and ensure that banks behave better,” said Mr Carter.

Spokesperson: Leon Carter, National Secretary, 0409 946 597
Media: Anaya Latter, 0432 121 636