The ACT agrees that the Government’s overall objectives for the financial system should be stability, competitiveness and consumer confidence. We appreciate the additional focus on business, corporate and institutional customers who need continued access to banking services in the event of bank financial distress. We are not intending to address the issue of retail deposit protection.
Our primary concerns lie in the area of critical banking services addressed in clauses 3.11 to 3.18 and Questions 3.7 to 3.9 and 3.11. Over and above ‘retail-type’ corporate banking services (e.g. corporate current accounts) we would also have concerns that broader financial systems (e.g. payment systems) can also be insulated from individual bank financial failure. We are keen to stress that there is not solely a difference in size between corporate and individual bank customers, but one of range – in terms of services used, but also scale – in terms of the impact on the wider economy. It may be therefore that these considerations are looked at as a separate but complementary area of the subsequent consultation.
Our members interact with all financial service providers and will be keenly interested in the development of the Government’s thinking. The ACT would be pleased to engage in discussions with the HM Treasury on these matters. In any event we look forward to commenting on the draft proposals when they are published in 2008.
