During the second half of a panel discussion on "Competition in financial services" at ASIC's annual forum yesterday, the tone turned decidedly Shakespearean when Wayne Byres, chairman of the Australian Prudential Regulation Authority, said he refused to use a certain B-word. It's the same B-word that ends the famous quote from Macbeth: "Double, double toil and trouble, fire burn and cauldron …"  The tone was set when Fiona Guthrie from Financial Counselling Australia asked Byres if he agreed with an assessment of the banking sector that: "18 per cent ROI is no competition".  Byres took issue with the comment, noting that "ROE for the whole banking system last year was 13 to 14 per cent.  "It is nothing to complain about. It's still healthy, still in excess of cost of equity, but well below what it was after the financial crisis," he said. "But we do need to recognise that we haven't had a recession for a while, and we shouldn't lose sight of the pattern of a typical cycle, which is eight good years and two bad ones." "We haven't had that here yet, so you want the banks to be able to build up a buffer for when the business cycle inevitably turns." His opposite number at ASIC, Greg Medcraft, had a very different take on the question of competition in the banking sector.  He said, "The residential mortgage market is disgraceful in this country - where borrowers accept whatever their bank offered." He put this in the context of an argument for fixed margin loans over a benchmark such as LIBOR, as happens in the corporate sector.  Competition in that market would be quite good for consumers. Byers, asked for a reaction to Medcraft's earlier assessment that Australia was in danger of a bursting housing bubble, said: "I don't use the B-word, I refuse to use the B word. It's superficial. It implies we are binary: we are in it, or not in it.  "That's too simplistic, plus no-one knows what [a housing bubble] is anyway. "House prices are high and in some cities are rapidly rising; we have high household debt, subdued income growth, very strong competitive pressures and historically low interest rates.  "That's a recipe that, if everyone's not careful, the risk in the system is going to rise. Part of our effort is just to make sure everyone's exercising a slightly higher than normal degree of caution in the way that they're conducting housing lending."