April, 06, 2010

The federal government must stop the erosion of competition in retail banking through mergers and acquisitions, the Australian Chamber of Commerce and Industry (ACCI) says.It says small businesses have endured tighter lending criteria and higher relative lending rates since the onset of the global financial crisis as banking competition diminished significantly.

In a submission to a forthcoming Senate inquiry into small businesses' access to finance, ACCI says the government should also ask the Productivity Commission to examine the degree of competition in lending to small business."Since the onset of the global financial crisis in June 2007, Australian banks have become more risk averse and have further tightened their lending criteria and increased risk margins, especially for business owners," ACCI said in its submission.

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