The report of the Senate inquiry into banking competition will urge the Government to resist calls for stricter regulation of the big lenders and to instead focus its efforts on boosting funding for smaller rivals, the
Sydney Morning Herald reports.
The inquiry's report, which is still in draft form, will suggest the speedier introduction of relief from interest withholding tax for foreign banks as one possible measure to increase pressure on the four major banks that dominate the industry in Australia, says the article.
The Australian Government has already said it plans to phase down this tax from 2013. Treasury told the Senate committee that any accelerated removal of IWT would come at a cost of A$750 million
The committee's report does not recommend any curbs on banks' interest margins but does canvass the merits of additional props for home loan finance, similar to those that apply in Canada.