Home and business loan borrowers may see the major banks offer them lower interest rates and fees when the revised international Basel Capital Accord comes into effect around 2006. The big banks are set to enjoy a greater competitive advantage over their smaller rivals under Basel II which allows all banks to reduce the amount of capital they must hold if their risk controls are accurate.

This will favour large banks which spend vast sums of money tracking and analysing risk data, according to PricewaterhouseCoopers. But the downside for the consumer is that the major banks will be less likely to accept high-risk customers: There will be a "downward migration" of risk, says PwC. These customers will then have to turn to smaller banks or the non-conforming loan market.