Financial inquiry 'must be broad'

Westpac has argued that Joe Hockey's inquiry into the financial system should not focus solely on competition, saying it needs to take a broader look at what helped Australia dodge the worst of the global financial crisis.

Westpac has argued that Joe Hockey's inquiry into the financial system should not focus solely on competition, saying it needs to take a broader look at what helped Australia dodge the worst of the global financial crisis.

The bank's institutional boss, Rob Whitfield, said the inquiry should examine deep-seated shifts taking place in finance, rather than pursue narrow agendas.

While Mr Hockey first called for the inquiry several years ago, against a backdrop of growing concerns about competition in banking, Mr Whitfield said it must also broach issues including taxation, infrastructure, superannuation and insurance.

"What we don't want to see is a really narrow-based inquiry," Mr Whitfield said at a Financial Services Institute of Australasia conference in Sydney.

"We don't want to just restrict it to competition. We want to see the benefit of what has been a really strong financial system that has thrived through the GFC and a really strong banking system that has thrived through the GFC."

The big four banks have consolidated their market share in the past five years, controlling more than 80 per cent of all deposits and home loans.

Given this shift, customer-owned lenders are pressing for competition to be high on the agenda at the inquiry - for which Mr Hockey has not yet set terms of reference.

Bankmecu chief executive Damien Walsh said a key issue to be addressed was the tax treatment of deposits, which are taxed more heavily than shares and other asset classes.

NAB's executive general manger of capital markets, Steve Lambert, said he hoped the inquiry was of similar standard to the Campbell review, which sparked a wave of reforms in 1980s including the liberalisation of the financial system.

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