Interpac Business and Migration Solutions Melbourne Australia

(October 22, 2010)

AUSTRALIAN banks could almost be subject to possible action over "signalling" on interest rates, the ACCC said today.

The warning from Australian Competition and Consumer Commission chairman Graeme Samuel today followed similar comments by Mr Samuel last week when he said signalling by banks of interest rate strategies to one another  borders on "misconduct".

Today, Mr Samuel said: "There's a constant problem when you've got competitors signalling to each other as well as signalling to the public what they intend to do with their prices, in the case of the banks, interest rates."

This public talk softens up the public for any rate rise and sends signals to any competitors, he told ABC radio.

Mr Samuel didn't want to define the activity as public collusion but he said it is a public semaphoring of intentions and the ACCC is concerned about this.

The banks have been told they are "bordering on conduct that could be treated as anticompetitive", with this sort of behaviour in the European Union and US likely would be examined with a great deal of vigour by regulators, although this can't happen in Australia under current law at the moment, he said.

(Source:theAustralian)