A group of economists with a public policy bent are calling for a "basic bank" to provide a counterweight to the power of the four major banks, the
Sydney Morning Herald reported.
One model for the bank is Kiwibank in New Zealand, a subsidiary of New Zealand Post and established by the former Labour government.
Kiwibank is a moderately effective check on the pricing power of the big four banks in some consumer banking products. Executives at big banks at times accuse Kiwibank of acting in an uncommercial fashion.
In an open letter to the Australian government published by the SMH, the six economists express concern that banks are using their privileged access to government guarantees, saying they are "rushing offshore" to expand even though Australians are "repeatedly told that our banks were lucky not to have had substantial overseas exposures".
The open letter is signed by six economists: Nicholas Gruen, chair of the Government 2.0 Task Force (and owner of a mortgage broking business); Christopher Joye, chair of the former government's home ownership task force (and also part owner of a niche mortgage funder); Joshua Gans, a professor at Melbourne Business School; Stephen King, a Monash University professor and former ACCC commissioner; John Quiggin, a professor at Queensland University; and Sam Wylie, a management consultant.