The government recently allowed credit unions, insurers, and mortgage lenders to offer a wider range of financial services to boost competition and efficiency.
Rationalization is needed.
According to one study, Australian banks could slash their staff by a third without sacrificing competitiveness. Return on equity is shrinking and costs are rising. Four interest rate cuts in the past year have pared margins. There have been some mergers. Westpac, one of the country's largest, recently acquired two regional banks.