18 Questions
What is the estimated value of the deal between ANZ and Suncorp's banking arm?
$4.9 billion
What is one of the conditions imposed on the combined entity?
No net job losses across Australia and no regional branch closures for three years
Why has the Australian government's policy response been criticized?
It has been inconsistent in its approach to industry concentration
What is the name of the banking service that ANZ must 'make every effort' to join?
Bank@Post
How long must the combined entity ensure no regional branch closures?
3 years
What is the main concern about the deal between ANZ and Suncorp's banking arm?
It will lead to a significant reduction in competition
What is the current issue facing the Australian public, according to the article?
The cost-of-living crisis
What action has the government taken against Australia's supermarket oligopoly?
Imposed huge new fines for mistreatment of suppliers
What was the main goal of the 'trust-busting' movement in the United States?
To prevent any reduction in competition
What led to a more permissive attitude towards mergers in the past?
The 'Chicago Revolution'
What is the role of the Australian Competition Tribunal?
To appeal against ACCC decisions
Why might the government intervene more in certain mergers?
Because of the industry's political sensitivity
What is the main reason behind the trend of bank branch closures in regional areas?
Increased online banking services
What is the proposed solution to address branch closures?
Using Australia Post as a service location for major banks
What has been the public's perception of business competition in Australia?
That there is not enough competition
What is the current status of the review on competition policy?
It is unlikely to report within the current parliament's term
What was the outcome of the banking royal commission?
Banks managed to keep out of the spotlight
What is the alternative to using Australia Post for banking services?
Establishing a new public bank
Study Notes
ANZ-Suncorp Merger
- Treasurer Jim Chalmers has approved the $4.9 billion deal for ANZ to acquire Suncorp's banking arm, the largest in Australian banking since 2008.
- The deal is subject to conditions, including no net job losses and no regional branch closures for three years.
- ANZ must also join Australia Post's banking service "Bank@Post" and make lending commitments worth billions of dollars for energy, infrastructure, and housing projects in Queensland.
Industry Concentration and Competition Policy
- The deal raises concerns about reduced competition in the banking sector, contradicting the government's stance on curbing industry concentration in other sectors.
- The government's approach to competition policy appears inconsistent, with mixed messages on mergers and industry dominance.
- The Australian Competition and Consumer Commission (ACCC) had denied authorization for the merger last year due to competition concerns.
Historical Context of Competition Policy
- The "trust-busting" movement in the US in the late 19th and early 20th centuries aimed to reduce monopolies and promote competition.
- The "Chicago Revolution" in the 1970s argued that mergers promote efficiency and that monopoly power is difficult to establish without government assistance.
- The Chicago school of thought has influenced Australia's approach to mergers, but there has been a counter-reaction in recent years, particularly after the global financial crisis.
Government Intervention and Market Power
- Governments are more likely to intervene when market power becomes politically sensitive.
- The ANZ-Suncorp merger may attract less attention due to banks being somewhat out of the spotlight since the banking royal commission.
- The government's tougher stance on supermarkets is likely due to their high market concentration and current political sensitivity.
Banking and Regional Branch Closures
- ANZ's requirement to join Australia Post's banking service is an attempt to address regional branch closures.
- Almost 800 branch services have closed in regional areas between 2017 and 2023 due to the shift towards online banking and reduced cash usage.
- Australia Post is being used to fill the gap left by bank closures, with a community service obligation.
Discover the details of the $4.9 billion deal between ANZ and Suncorp's banking arm, including conditions and commitments.
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