* ACCC to review Big Four powers, barriers to entry, lending caps
* It found “accommodative oligopoly behaviour” in mortgage pricing
By Paulina Duran
SYDNEY, April 11 (Reuters) - The Australian competition regulator said it plans to review the powers of the country’s four largest banks, amid concerns that lending caps have cut competition and high barriers to entry have stifled rivals.
The move is the latest sign Australia’s “Big Four” banks, which control about 80 percent of the home lending market, face greater scrutiny and regulation to correct abuses of power following years of scandals and corporate wrongdoing.
The scope of the reviews was still being decided, but they would likely focus on the power of the four largest banks, barriers to entry in the industry, and constraints on consumers switching between banks, the Australian Competition and Consumer Commission (ACCC) said.
The commission announced the reviews in a submission to the government’s chief economic advisory body which was published on Tuesday.
The reviews come on top of an ongoing judicial inquiry into Australia’s financial sector which has already revealed the banks abused their power and routinely breached laws when issuing home loans, credit cards and other consumer loans.
Last year, the ACCC was given extra powers to oversee the behavior of the big four banks - Commonwealth Bank of Australia , Australia and New Zealand Banking Group, Westpac Banking Corp and National Australia Bank - and other financial institutions.
In one of its first uses of the new powers, an interim inquiry in March on the mortgage pricing mechanisms of the banks and Macquarie Group found signs of “accommodative oligopoly behaviour”. The ACCC’s final report is due on June 30.
The ACCC also is expected to examine recent claims made by the Productivity Commission, the government’s chief economic advisor, that policy interventions by the banking regulator to curb asset bubbles had delivered record profits for the banks at the expense of competition.
In February, the Productivity Commission also recommended the ACCC should be a member of the Council of Financial Regulators, which is chaired by the central bank and holds the main responsibility of financial system oversight, to act as “the competition champion”.
Australia’s big four banks reported a combined net profit of A$31.5 billion ($24.5 billion) in the 2017 fiscal year, up 6.4 percent on a year ago, according to KPMG.
$1 = 1.2882 Australian dollars Reporting by Paulina Duran in SYDNEY; Editing by Stephen Coates