The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Wednesday, April 13, 2011

When was the last new entrant into Australian retail banking?

Now, this is a great question for policymakers to address if they want to get serious about improving competition in the retail banking market. I honestly cannot remember when it was that the last new entrant emerged. All of the existing banks have been present for decades. The non-banks only participated in home loans (assets) rather than deposit-taking (liabilities). So, why have there been no new entrants? Presumably because the barriers to both entry and effective competition (or the scale, funding, and cost of capital advantages of the incumbents) are so exceptionally high. Maybe Mark Bouris's new business, Yellow Brick Road, can break the drought...Interestingly, the last time I can remember a company seeking a new banking licence was GE Money back in the day when they bought Wizard. But they never went ahead with it...

Update: Of course, a friend reminds me that the most recent new entrant was ING Direct back in the mid-to-late 1990s.

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at 9:27 AM