Finland’s largest 3 banks (OP Bank, Nordea and Danske Bank) occupy some 70% to 80% of the banking market depending on the various sectors of the markets – deposits, home loans, loans to big companies and loans to small and medium-sized businesses.
Competition is not a word bankers really know or like, and they certainly do not want to hear any complaints about a lack of competition from any regulator. The politicians love them anyway because they bankroll the biggest political party in return for gracious favours.
Now we hear that Australia’s competition regulator has been planning to break up a similar oligopoly of their 4 largest banks. The banks have been caught and punished for unacceptable behaviour in the courts, and the regulator feels that a dose of competition is the best solution to fix this greedy sector.
Australia’s biggest banks, ANZ Bank, Westpac, Commonwealth Bank of Australia and National Australia Bank, together have more than 75% market share. They benefit from lower funding costs than the smaller banks because of the implicit government guarantee to save the banks.
A public report on the finance sector will soon be published by the Australian Competition and Consumer Commission which is said to demand more competition to protect consumers.
The same medicine is needed here in Finland with the 3 big Finnish banks, but it is wise not to hold your breath because the big 2 parties rely heavily on OP Bank and on Nordea for support in the coming elections.