Commonwealth Bank CEO Ralph Norris is fired up about the Federal Government’s recent regulatory changes, and isn’t pleased about the costs his bank has to pay because of them.
At a business lunch on Tuesday Norris said that the regulatory reforms in the banking industry have cost CBA $100 million a year and a hefty $500 million to the banking industry as a whole annually. “The amount of regulatory change is staggering, and so is the cost,” Norris said. “One really has to ask whether all these changes meet any reasonable social benefit-cost analysis.”
The government’s current round of changes includes procedures such as prohibiting exit fees on home loans, forcing banks to regulate mortgage product information and guaranteeing credit card repayments are paid to the most expensive part of the debt first.
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The CBA has made eight major written inquiries and participated in 44 others with the Australian Bankers Association but is working alongside the government to ensure further reforms are make sense for the banks. “The amount of regulatory change is staggering, so is the cost... one really has to ask whether all these changes meet any reasonable social cost-benefit analysis,” Norris said.
While Norris did not comment on the future of interest rates, he did say that the Reserve Bank has done “a very good job” over the past 15 years or so, including on interest rates.
He said the CBA is expanding its brand in Asia, shooting for 150 branches in Indonesia in the next couple of years. Other changes from CBA include a major renovation of its core banking system to respond to “a real-time world.”