COBA congratulates APRA on removing “distortion”

The Customer Owned Banking Association, which represents smaller banks, credit unions and friendly societies welcomed APRA announcement of stricter capital requirements for mortgages. The CEO of COBA said the decision “brings us closer to a level playing field”. Under the current regime, major banks could allocate a lower amount of capital than other mortgage lenders. This gave the majors a funding cost advantage and was “distorting the market”. Suncorp Bank, Bendigo and Adelaide Bank, Bank of Queensland and ME released a statement which said, “Standardised banks are already required to hold more capital …on their residential mortgage exposures. This remains unchanged.”