The behaviour of Australia's biggest banks isn't getting better. Instead the Australia Institute claims banks have emerged from the financial crisis with more market share and the opportunity to make too much profit.
The global financial crisis has meant Australia's top four banks have moved into the world's top 10 banks in terms of financial soundness. While that says a lot about Australia's regulators and regulatory environment, the global financial crisis has also meant much of their competition has been wiped out as customers consolidate around 'sound and solid' institutions.
Recent research by the Australia Institute reveals the extent of community mistrust of the financial sector. Indeed, a large majority of adult Australians hold banks and other financial institutions responsible for the current debt crisis. Although many people believe that personal responsibility in financial decision making is important, there is broad consensus that the banking sector has lost the element of social responsibility that tempered lending practices in the past. Around three in four respondents to a nationwide survey agreed that "banks are too willing to lend money to people who can't afford the repayments".
There have been 12 successive years of interest rate rises, and a 12.5% rise from 2007-2008 in debt to banks, valued at $762b. This is practically bad with 18-27 years old that take out 1/3 of credit cards and account for 1/3 defaults. As private debt is now 156% of GDP majority of people believe that banks allowed and try to get people to take out loans they cannot pay back.