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The ACCC chairman says the watchdog's impending draft report into competition in the financial system will uncover “some surprises” and provide clarity around the major banks’ mortgage pricing decisions from last June.
"We will be bringing out a draft report in February or March which will provide more transparency on how the banks make their interest rate decisions and how the market structure and the level of competition in the banking sector impacts those decisions ... that will be quite an important report ... there are some surprises,” ACCC Chairman Rod Sims told the Australian Financial Review in an article published on 8 January.
Sims told the AFR that the ACCC examined thousands of internal documents relating both to the major banks’ pricing of home loans and how they handled the bank levy.
Back in June 2017, the banks indicated that rate increases were primarily due to APRA’s regulatory requirements, but once under further scrutiny they admitted that other factors contributed to the decision, including profitability.
In December, the ACCC was called on by the House of Representatives Standing Committee on Economics to delve further into the industry-wide repricing of both new and existing interest-only loans.
The committee recommended that the ACCC examine internal documents from the four major banks to determine whether the information aligned with the banks’ claims that rate rises were a direct result of APRA’s speedbumps, which were only intended to target new interest-only borrowing.
The investigation falls under the ACCC’s present enquiry into residential mortgage products, which was established to monitor price decisions following the introduction of the bank levy.
