The Senate Inquiry report into co-operatives, mutuals and member owned firms is a “strong endorsement” of the business model, according to the Customer Owned Banking Association (COBA).
The Senate Economics References Committee report, handed down in the Senate yesterday, delivers a blueprint for policymakers to “embrace a business model where customer interests are not in conflict with shareholder interests”, says COBA.
The banking association particularly welcomes the report’s recommendations on regulatory capital for customer-owned banking institutions and for the customer-owned model to be explicitly considered in Regulatory Impact Statements on new policies.
“This report acknowledges that the customer-owned model has not had a fair go in regulatory frameworks that are set up to deal with listed companies,” COBA CEO Mark Degotardi said.
“The report recognises that more needs to be done to accommodate the alternative model that we bring to the market – businesses that are owned by their customers, by their employees and by enterprises and community groups.
“The report provides a valuable snapshot of our diverse sector, identifies barriers to growth, innovation and competition, and focuses on the key issue of access to capital. We want to be able to compete with listed businesses on a level playing field.”
The Committee is recommending a list of measures to raise the profile of the co-op sector and to increase awareness of the sector to policymakers and other stakeholders.
“A healthy, vigorous retail banking market needs strong customer-owned banking institutions. Diversity of business models is good for stability and competition,” Degotardi said.
According to COBA, the customer-owned banking sector has 4 million customers and $97 billion in total assets.