Abuse of market power

Apparently, the Australian Big 4 banks have been talking about raising rates outside of RBA movements again. Website www.keepbankshonest.com.au suggests that they have already raised rates by 1% above RBA. The Banks’ cite higher funding costs as a reason for future hikes. My opinion is that it’s absolutely despicable for them to consider doing this. It’s an abuse of their market power. They have to act responsible as they have the economy’s health and Australian’s livelihoods in their hands. The GFC has handed the Banks’ a massive amount of power (i.e. huge market share). They have an oligopoly over the banking market – something the smaller players just can’t crack into. If the Banks’ are allowed to increase interest rates independently, they will become more powerful and more profitable which will mean less competition. The Federal Government needs to wake up to itself and take action. Verbal warnings from the Federal Treasure are useless! This week, CBA owned BankWest withdraw its hallmark competitive product. Why? Probably because it was cannibalising CBA’s profit. No need to offer such a good deal in a market you dominate. Right?