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International Financial Institutions lack confidence in Australian Reserve Bank

“The RBA is to to review their Credit Card Stuff Up The reserve Bank of Australia (RBA) has announced that it would begin a review of Australia’s credit and debit card systems in mid 2007, with any changes not likely to be in effect until the end of 2008. Mastercard and Visa International have slammed the RBA’s plan to review Australia’s card payments systems, calling for an independent body to conduct the review, believing that the RBA would not be critical enough of its own regulations and won’t admit its mistakes. The Card Industry says that Australian consumers have been slapped in the face with $1 billion in extra fees because of the RBA’s ill-considered regulations. Whilst governments elsewhere are encouraging free markets, Australia’s RBA has been heading towards nationalising the payments industry. Their recent changes passed a windfall saving to merchants, which costs banks have passed on to cardholders. Independent research by Roy Morgan and Ernst & Young suggests that card holders are now paying double the amount that they paid before the RBA’s regulations, either through increased annual fees or other methods to recover lost revenue. The review may mean that retailers and other merchants will now get large fee increases. The botched outcome of the RBA’s recent regulations is another major confidence issue for Australian retailers and consumers who have seen the RBA increase interest rates to swash confidence in the Australian Economy and caused a lot of hardship over debt repayment in the recent months.”

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