Economists call for basic bank to challenge Big Four

A group of six influential economists have written an open letter to Kevin Rudd and Wayne Swan, calling on them to look into establishing a "basic bank" akin to New Zealand’s Kiwibank.

The group has urged the prime minister and the treasurer to set up a "people’s bank" offering term deposits and savings accounts managed by the Future Fund. It is hoped that doing so would help to break the Big Four’s monopoly over retail deposits, as well as the home loans market.

However, the Age reports that a spokesperson for treasurer Swan appears to reject the calls for a review looking at the shape of the current financial system, claiming that it has responded very well during this crisis period.

The economists had charged that the government would do well not to discount the possibility that Australia’s relative economic health had been the result of nothing more than a "lucky roll of the dice".

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