SYDNEY • Australia yesterday accepted most key recommendations of a government-backed inquiry that called for more competition and stronger capital reserves for the nation's four major banks, as well as reforming the US$1.2 trillion (S$1.7 trillion) superannuation system.
The review, chaired by former Commonwealth Bank of Australia (CBA) head David Murray, last year called on Australia's major banks to raise additional capital to ensure they become among the world's safest lenders.
Australia's "Big Four" lenders - CBA, Westpac Banking Corp, ANZ Banking Group and National Australia Bank - which hold a combined market share of more than 80 per cent, have raised more than A$20 billion (S$20 billion) so far but will need to set aside a similar amount over the next two to three years, analysts said.
"We are constantly focused on ensuring, from a prudential point of view, that our banks as financial institutions are safe... That's critical for the whole economy," Australian Prime Minister Malcolm Turnbull told reporters yesterday.
Australian banks survived the global financial crisis that began in 2008 relatively unscathed, and have been generating record profits in recent years, largely on the back of massive mortgage books.
The government will also look at improving "competition, efficiency and transparency" in the A$1.7 trillion superannuation system to boost after-fee returns for fund members, and help provide more retirement income products to retirees.
Australia's so-called super funds have, on average, returned 7.1 per cent over the past five years, according to government data.
The government said it would limit excessive charges for bank and credit cards, a move also recommended by the inquiry.