Rudd says banks are gouging profits

The government, the reserve bank and the Treasury have all signaled to the banks that they are being watched because of concerns that competition is not working effectively in financial services.

Eighty five per cent of new home loans last year were written by two banks and 50 per cent of all outstanding home loans are in the hands of the same two, Westpac and CBA. Prime Minister Kevin Rudd said: "The RBA is right — the banks have been gouging."

The PM foreshadowed "a whole new bunch of credit laws — tough credit laws which will enable the regulators to crack down on gouging across the financial sector. This will be an important change for the year ahead".

Source: The Australian