NAB boss questioned on big issues at CEDA event
Posted : Wednesday, June 29, 2011
The European debt crisis, the genuineness of NAB's "breaking-up
with the other banks" campaign, and the superiority of a carbon tax
over direct action, were the key topics touched on by NAB Managing
Director Cameron Clyne in a wide ranging interview at a recent CEDA
event in Melbourne.
Mr Clyne said the Greece situation was interesting because it
was difficult to know if it was a 'business as usual' crisis as
part of negotiations for the bail-out package or a real crisis of
systemic global significance.
While he said it was generally agreed Greece in its own right
was not likely to have a significant impact on the global economy,
the counterpart impact was of significant concern.
However, Mr Clyne said while the situation was fragile, he was
optimistic a solution could be found.
On the resources boom in Australia, Mr Clyne said that he
subscribed to the view that it would be a long-term boom that would
run for some time and, coupled with demand out of Asia, would have
very positive implications for Australia.
However, he said the boom did present some near and long term
In the near term he said that was presenting as a high
Australian dollar, causing some industries to suffer and a
structural readjustment of our economy.
On the threat of mineral investment in places like Africa
reducing the length of our resources boom, he said they generally
considered it a 30 year plus proposition before that would have any
On climate policy, Mr Clyne said of the two options on the table
- direct action or a carbon tax then ETS - the carbon tax was
"If you're looking for a purely economic assessment, the carbon
tax is economically superior to direct action…it will drive
investment and certainty," he said. "And we do need to see
certainty because investment is not flowing into that sector."
When asked if the Reserve Bank should raise interest rates Mr
Clyne used the question as an opportunity to highlight concerns
with the new bank regulations.
"Several months ago I'd have happily answered that but with the
new price signaling legislation we don't have a transparent
conversation about those things so I don't know what the reserve
bank should do."
There should be real scrutiny of pricing decisions and I should
be held accountable for explaining pricing decisions above the
reserve bank, he explained. However, the new legislation provides a
reason not to talk.
On questioning about NAB's genuineness about competition and
"breaking-up with the other banks" campaign, Mr Clyne said it was
the real deal.
While he highlighted that it was a strategic move by NAB to
increase their share of the retail banking market, he said it was
also about ensuring industry acted first, so that Government did
not need to intervene with more regulation around competition.
Mr Clyne said he rejected claims their approach had destroyed
industry profitability and it was actually about saving industry
profitability by acting before government.
There was a perception in the community that there wasn't
competition in banking and that needed to be addressed, he
"This took many years in planning; we didn't wake up on February
14 and decide we wanted to break up," he said.
"Government's intervene where they see opportunity and a strong
sense of community concern and where the industry that is
generating that concern is not actually responding.
"When (government) tend to respond they use blunt instruments
and those instruments are the only ones at their disposal."
If you're deaf to concerns of consumers all you're doing is
inviting government intervention as we've seen in other markets, he
He said the result was that while there had been some government
intervention at the fringes there had been little intervention
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