This report outlines the federal government's proposed banking reforms to promote competition and assist consumers.

To empower consumers, the government plans to:

•    Ban exit fees outright on new home loans from 1 July 2011
•    Boost consumer flexibility to transfer deposits and mortgages
•    Introduce a mandatory key fact sheet for new home loan customers
•    Empower the ACCC to prosecute anti-competitive price signalling
•    Fast-track legislation to get a better deal for Australians with credit cards
•    Launch a national community awareness campaign to empower consumers in banking
•    Set up a taskforce with the Reserve Bank of Australia to enhance ATM competition reforms

To support smaller lenders so they can put more competitive pressure on the big banks, the government plans to:

•    Build a new pillar in the banking system based on the combined competitive power of our mutual credit unions and building societies
•    Confirm the Financial Claims Scheme as a permanent feature of our financial system, to secure critical deposit funding for smaller lenders
•    Introduce a further $4 billion investment to support the Residential Mortgage Backed Securities market which many of our smaller lenders rely on to make cheaper loans
•    Accelerate the development of a 'bullet bond' structure for RMBS issuance to strengthen and diversify RMBS funding for smaller lenders

To secure the long-term safety and sustainability of our financial system, the government plans to:

•    Allow all banks, credit unions and building societies to issue covered bonds to broaden access to cheaper, more stable and longer-term funding, and harness our national superannuation savings to domestically fund more productive investment in our economy
•    Develop a deep and liquid corporate bond market by launching the trading of Commonwealth Government Securities on a securities exchange, to reduce our reliance on offshore wholesale funding markets