Commonwealth Bank more valuable than McDonald's and American Express: Tweet of the day

There’s more money to be made selling home loans than flipping hamburgers, it seems.

Australian Financial Review columnists Christopher Joye has tweeted that the Commonwealth Bank, now has a greater market capitalisation than global brands like American Express and McDonald's, with the four major banks valued at a collective $300 billion.

However, Joye believes Australian financial system would be safer and more stable with “eight medium-sized banks, which were individually non-essential to the overall economy, than the four too-big-to-fail behemoths we have today”.

Writing in the AFR today, Joye says the “majors’ too-big-to-fail features bequeath tremendous comparative advantages”.

“In banking, he with the lowest cost of funding wins via higher profits, greater market share, or both.

“Standard & Poor’s lifts the majors’ credit ratings two notches higher purely because it believes taxpayers will bail them out during a crisis. No other Australian deposit-taker gets this rating relief.”