A new economic expert report commissioned by the regulator suggests it is concerned about possible ‘coordinated effects’ among the big banks.
The competition regulator has confirmed that it has delayed its decision by seven weeks on whether ANZ Bank should be allowed to take over Suncorp Bank, giving it more time to consider the risk of potential collusion, which is coming into sharper focus.
The report, by Sydney University professor Nicolas de Roos, was commissioned for the ACCC by the Australian Government Solicitor on March 30, five days before it released its statement of preliminary views on April 4 that. His analysis was received the following day. In earlier submissions to the commission, ANZ rejected suggestions that the deal would allow it to coordinate conduct with other banks in any market.It pointed to the large number of competitors of varying sizes in banking, saying this made coordination “practically difficult”, and that banks’ different funding profiles were a factor in their pricing decisions.
“Coordinated effects” are described in the ACCC’s merger guidelines as the tendency for mergers to incentivise firms to, implicitly or explicitly, coordinate pricing, output or related commercial decisions. It asked Professor de Roos to provide “a high-level framework” to assess the likelihood that the deal would make it easier for ANZ to coordinate behaviour with other big banks including on mortgage pricing.
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