The ABA was commenting on the summit declaration¹ issued today following the G-20 meeting of leaders in Toronto over the weekend.

Steven Münchenberg, Chief Executive of the ABA, said: “We are pleased that the Treasurer, Wayne Swan, was able to look after Australia’s national interests by opposing a global bank tax which would have put the brakes on Australian economic growth. Before attending the meeting, the Treasurer said he was aiming to convince the other G-20 leaders that there needed to be national flexibility because Australia’s circumstances were different compared with other nations.”

“Australia’s solid and reliable banking system weathered the global financial crisis (GFC) and our banks continued to lend to businesses, underpinning Australia’s economic growth. This is in stark contrast to the experience in the US, UK and parts of Europe where some banks collapsed, others were nationalised and economies experienced sharp downturns resulting in recessions.”

“A global bank tax is not appropriate for Australia. I think what you saw at the G-20, is the nations that are in favour of some sort of tax are where banks had real problems. These countries are taxing their banks because they had to use taxpayer money to bail out the banks, unlike Australia, Canada and other countries.”

“Taxpayer money was not used to bail out Australian banks. In fact, Australian banks and other lenders have so far paid around $1.1 billion for the use of the Government’s wholesale funding guarantee and will pay more than $5 billion over its full life.”

On capital and liquidity proposals, the ABA welcomed the explicit consideration by G-20 nations of the need for adequate transition periods, to be determined, at least in part, by national regulators.

The ABA was also pleased to see the call for more effective supervision of the financial regulatory framework in all G-20 countries.

Mr Münchenberg said: “We think Australia is well ahead here – not only do we have a well managed banking sector, but also supervision by effective regulators which worked well during the GFC. We would like to see other countries follow our lead.”