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Westpac argues for a ‘broad’ inquiry

Whilst it is expected that Joe Hockey’s inquiry into the financial system will carry a strong focus on competition within the sector, Westpac (ASX: WBC) has urged that a broader approach be taken, including looking at what helped Australia cope through the global financial crisis (GFC).

Although Hockey has not yet set terms of reference for the inquiry, there have been at least three Senate enquiries into competition in the banking sector. Given that Westpac, Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ) and NAB (ASX: NAB) control roughly 80% of the market’s deposits and home loans, competition will be one of the more obvious issues to be addressed.

However, Westpac’s institutional boss Rob Whitfield has stated that the other issues that Hockey will need to look into much deeper include taxation, superannuation, insurance and infrastructure. He said “What we don’t want to see is a really narrow-based inquiry.”

As highlighted by The Sydney Morning Herald, customer-owned bank Bankmecu recognises that one of the key issues to be addressed is the tax treatment of deposits, which are currently taxed more heavily than shares and other asset classes. Meanwhile, NAB’s executive general manager of capital markets Steve Lambert hopes that the inquiry will be similar to the Campbell review in terms of standards.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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