April 08, 2009

Cartels 101

Banking 'cartel' slammed for pocketing cut - ABC News (Australian Broadcasting Corporation)
Editor of the banking newsletter The Sheet, Ian Rogers, told ABC Radio's PM the big four banks do not feel any pressure to fully pass on interest rate cuts because they face little or no competition.

"It's important to remember that the banking industry in Australia is an oligopoly and it's really fair to call it a cartel and it's no surprise that the banks that are in the cartel would go about undertaking price coordination and cartel behaviour," Mr Rogers said.

"From my following of the public behaviour and the public statements of various banks over the last few weeks there has been a clear effort in the normal way the banks go about these things, which is talking in public about what they are thinking about in order to coordinate an increase in margins on home loans and no doubt on other loan products as well and that's what's going on."

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