August 13 2016
    Sydney Morning Herald

Australia's big four banks feeling pressure from parliament


If bankers were hoping Malcolm Turnbull's election victory would ease the political heat they are facing, it's now clear they were very much mistaken.   :) 

The war of words between bank bosses and their critics in federal parliament shows no signs of easing.

Banks should pass on rate cut: Turnbull

The big banks should pass on interest rate cuts or 'they owe the Australian people a full explanation,' Prime Minister Malcolm Turnbull says. Courtesy ABC News 24

Indeed the hostility to banks was cranked up a notch this week, as lenders reported multi-billion dollar profits, hot on the heels of them withholding half of last week's official interest rate cut from borrowers.

Labor opposition leader Bill Shorten blasted the "greed" of the sector for its interest rate decisions, which he said was the result of executives looking out for themselves in a "fat cat" bonus system.
CBA chief executive Ian Narev won't back down from "unpopular"

"There is a culture in banking which puts the profits of banks, big profits, billions of dollars of profits ahead of the national interest and interests of mum and dad mortgagees, small businesses and people with large credit card interest rate debts," he said.

Shorten did not rule out demanding a new tax on banks, as put forward by the Greens.   :)


CBA's boss Ian Narev fired back as the bank delivered $9.45 billion in profits, claiming "bank-bashing" was threatening to unsettle global investors that help to fund the financial system.

"The only thing the public would like less than a profitable bank is an unprofitable bank," Narev said.


Narev went on national television, newspapers, radio, online media and Twitter to put his case for why it had made the decision that so enraged Canberra.

The stoush has put the spotlight on the inner workings of banks, and what a world of ultra-low returns means for two types of customers with opposing interests: depositors and borrowers.

This will surely be a taste of things to come, after Turnbull called bank bosses to regularly appear before a parliamentary inquiry to explain their pricing decisions.

But despite all the political bluster, there remains a question mark over how much the banks' mortgage rate moves were really about balancing interests of various customers, as opposed to protecting their bottom lines.

    The finely-balanced parliament ensures [a royal commission] will remain on the agenda.   :)

Meanwhile, the ferocious debate about interest rates and profits has only fuelled the separate calls for a royal commission into the industry after a string of scandals.
Are banks really looking after depositors, or shareholders?

Chief executives of the big four have now all fronted the media to justify last week's move to withhold about half of the Reserve Bank's 0.25 percentage point cut in official interest rates.

Their line is consistent: banks need to balance the interests of mortgage customers with those of people with deposits and their shareholders.

Banks are of course free to set their own commercial mortgage rates, and experts agree that as interest rates fall to new lows, bank profits are pressured. That is because banks must ensure they are offering depositors enough to prevent them shifting their money into other assets with higher returns, such as shares.

As a result of last week's changes, rates on term deposits have been increased by up to 0.85 percentage points, mainly for terms of a year or more.

But how many deposit customers will this actually benefit? And how does it compare with the benefit to banks of withholding half the RBA's cut?

The rate rises are for term deposits, which require customers to lock their money up, not "at call" savings accounts that make up a bigger share of banks' total deposit holdings.

Moreover, the most popular types of term deposits are for three or four months, whereas the banks have mainly increased rates for one to three-year terms.  The Reserve Bank noted that term deposits of the maturity where banks have increased interest rates account for less than 2 per cent of total bank funding.

   

Labor opposition leader Bill Shorten blasted the "greed" of the sector for its interest rate decisions, which he said was the result of executives looking out for themselves in a "fat cat" bonus system.  Yes Mr Shorten maybe you and the Greens are right.   :(    

wrote on Aug 13^th, 2016 at 3:09pm:

Labor opposition leader Bill Shorten blasted the "greed" of the sector for its interest rate decisions, which he said was the result of executives looking out for themselves in a "fat cat" bonus system.  Yes Mr Shorten maybe you and the Greens are right.   :(

Yeah, it is only a recent phenomenon.

lee wrote on Aug 13^th, 2016 at 3:15pm:

wrote on Aug 13th, 2016 at 3:09pm: Labor opposition leader Bill Shorten blasted the "greed" of the sector for its interest rate decisions, which he said was the result of executives looking out for themselves in a "fat cat" bonus system.  Yes Mr Shorten maybe you and the Greens are right.   :(     Yeah, it is only a recent phenomenon.

So we should continue to do nothing about it then ?

Its time wrote on Aug 13^th, 2016 at 3:20pm:

So we should continue to do nothing about it then ?

Nor at all. It was merely the ridiculous holier than thou claim about Labor and Greens. Labor had ample time to reign in the banks. The Greens are merely a pimple on the arse of Labor.

lee wrote on Aug 13^th, 2016 at 3:46pm:

Its time wrote on Aug 13th, 2016 at 3:20pm: So we should continue to do nothing about it then ? Nor at all. It was merely the ridiculous holier than thou claim about Labor and Greens. Labor had ample time to reign in the banks. The Greens are merely a pimple on the arse of Labor.

It's quite silly of you to be pointing fingers at Labor when the Coalition have been in power for 14 of the last 20 years and are in power now. The Coalition have had much more time to fix this problem. They are doing as close to nothing as they think they can get away with.

When Labor get back in, Labor will start a Royal Commission into the banking industry. Such an inquiry is strongly indicated. Why aren't the Coalition supporting this?

Bam wrote on Aug 13^th, 2016 at 5:07pm:

t's quite silly of you to be pointing fingers at Labor when the Coalition have been in power for 14 of the last 20 years and are in power now. The Coalition have had much more time to fix this problem. They are doing as close to nothing as they think they can get away with.

So you freely admit Labor were in for six years and did nothing. Thank you, it proves my point ... politicians are hopeless.

I'm just sitting back watching the fun develop over the long-held-to-be sacred cows in this society.... and how they've feathered their fine position of Entitlement ™ into a massive little earner for no effort.

Regulate the bastards.

This endless pursuit of greater and greater profit at the expense of the end user only causes never-ending upward pressure on incomes and wages etc, and thus massively contributes, not only to our 'lack of competitiveness', but also to rising unemployment, and hidden inflation.

Rampant capitalism is of no real value to any society, and needs to be controlled by regulation, and for far too long this country has been nothing but the pawns in the hands of the gluttonous greedy. Might make their shareholders happy in the short term, but in the end those shareholders are equally engulfed by the evils it creates.

I will modify that a little:-  ONLY the major shareholders - the inside runners, cronies, and mates - will end up having a heap of money.  The 'mums-and-pops' with their small shareholding will inevitably see that small nest egg vanish into the haze after retirement time, due to rising costs (hidden inflation) of living and further ravages of rampant capitalism, and will end up in the same pot as the current crop of 'self-funded retirees' - who are increasingly being forced onto part pensions.

Easy to see without looking too far that not much is really sacred.... not in a world run by the exploitationists.

---

lee wrote on Aug 13^th, 2016 at 5:52pm:

Bam wrote on Aug 13th, 2016 at 5:07pm: t's quite silly of you to be pointing fingers at Labor when the Coalition have been in power for 14 of the last 20 years and are in power now. The Coalition have had much more time to fix this problem. They are doing as close to nothing as they think they can get away with. So you freely admit Labor were in for six years and did nothing. Thank you, it proves my point ... politicians are hopeless.

That's a straw man.

The problems with the banking industry have only become apparent when the Coalition were in office. Why are you refusing to admit that the Coalition have done nothing useful to fix this? Labor have a very clear policy of making the banks accountable with a Royal Commission. Why are you not acknowledging this?

You really should take off your blue glasses and take a look at the real world sometime.

introduce a super profits tax for banks

Sir Grappler Truth Teller OAM wrote on Aug 13^th, 2016 at 5:54pm:

I'm just sitting back watching the fun develop over the long-held-to-be sacred cows in this society.... and how they've feathered their fine position of Entitlement ™ into a massive little earner for no effort. Regulate the bastards. This endless pursuit of greater and greater profit at the expense of the end user only causes never-ending upward pressure on incomes and wages etc, and thus massively contributes, not only to our 'lack of competitiveness', but also to rising unemployment, and hidden inflation. Rampant capitalism is of no real value to any society, and needs to be controlled by regulation, and for far too long this country has been nothing but the pawns in the hands of the gluttonous greedy. Might make their shareholders happy in the short term, but in the end those shareholders are equally engulfed by the evils it creates.

Or we could abolish limited liability. Anyone who receives profit from corporations should also act as guarantors for that corporation's conduct and be liable for the losses. No more of this nonsense of privatised profits, socialised losses. Losses should also be privatised.

Yes, both a profits tax AND a dividend tax.

And for forks sake, REGULATE the bastards.

Deregulation has been and is continuing to be a disastrous failure of epic proportions.

John Smith wrote on Aug 13^th, 2016 at 6:13pm:

introduce a super profits tax for banks

**falls about laughing**  (fond memories of the mining super-tax that was supposed to destroy the country - mining didn't need any help to destroy itself in the current global market... just another commodity... all Banana Republics founder when the price of bananas is way down due to a glut or huge stockpiling ...)

Bam wrote on Aug 13^th, 2016 at 6:15pm:

Sir Grappler Truth Teller OAM wrote on Aug 13th, 2016 at 5:54pm: I'm just sitting back watching the fun develop over the long-held-to-be sacred cows in this society.... and how they've feathered their fine position of Entitlement ™ into a massive little earner for no effort. Regulate the bastards. This endless pursuit of greater and greater profit at the expense of the end user only causes never-ending upward pressure on incomes and wages etc, and thus massively contributes, not only to our 'lack of competitiveness', but also to rising unemployment, and hidden inflation. Rampant capitalism is of no real value to any society, and needs to be controlled by regulation, and for far too long this country has been nothing but the pawns in the hands of the gluttonous greedy. Might make their shareholders happy in the short term, but in the end those shareholders are equally engulfed by the evils it creates. Or we could abolish limited liability. Anyone who receives profit from corporations should also act as guarantors for that corporation's conduct and be liable for the losses. No more of this nonsense of privatised profits, socialised losses. Losses should also be privatised.

Yes - you  own the corporation/company - you ARE the corporation/company when it fails or mis-behaves.  Your contribution to rectifying the corporation/company's problem is proportional to your shareholding.

If Regina Rhinegold owns 51% of shares and the company fails - she pays 51% of its debts.  If Jo Bloggsana owns 0.05% of its shares - she pays 0.05% of its debts.  That money doesn't disappear, and is held somewhere... let those who benefit and have benefited pay.....

Sir Grappler Truth Teller OAM wrote on Aug 13^th, 2016 at 6:34pm:

Bam wrote on Aug 13th, 2016 at 6:15pm: Sir Grappler Truth Teller OAM wrote on Aug 13th, 2016 at 5:54pm: I'm just sitting back watching the fun develop over the long-held-to-be sacred cows in this society.... and how they've feathered their fine position of Entitlement ™ into a massive little earner for no effort. Regulate the bastards. This endless pursuit of greater and greater profit at the expense of the end user only causes never-ending upward pressure on incomes and wages etc, and thus massively contributes, not only to our 'lack of competitiveness', but also to rising unemployment, and hidden inflation. Rampant capitalism is of no real value to any society, and needs to be controlled by regulation, and for far too long this country has been nothing but the pawns in the hands of the gluttonous greedy. Might make their shareholders happy in the short term, but in the end those shareholders are equally engulfed by the evils it creates. Or we could abolish limited liability. Anyone who receives profit from corporations should also act as guarantors for that corporation's conduct and be liable for the losses. No more of this nonsense of privatised profits, socialised losses. Losses should also be privatised. Yes - you  own the corporation/company - you ARE the corporation/company when it fails or mis-behaves.  Your contribution to rectifying the corporation/company's problem is proportional to your shareholding. If Regina Rhinegold owns 51% of shares and the company fails - she pays 51% of its debts.  If Jo Bloggsana owns 0.05% of its shares - she pays 0.05% of its debts.  That money doesn't disappear, and is held somewhere... let those who benefit and have benefited pay.....

Isn't that basically how Lloyds of London works/worked?

Bam wrote on Aug 13^th, 2016 at 6:12pm:

That's a straw man. The problems with the banking industry have only become apparent when the Coalition were in office. Why are you refusing to admit that the Coalition have done nothing useful to fix this? Labor have a very clear policy of making the banks accountable with a Royal Commission. Why are you not acknowledging this? You really should take off your blue glasses and take a look at the real world sometime.

'Moreover, the major banks pocketed an additional $3.7 billion in profits in 2012 as a direct result of refusing to pass on recent falls in official Reserve Bank interest rates to home loan borrowers. The banks’ profit levels are running at around $310 million a month higher than they would have been if the cuts were passed on in full, the Australia Institute reports.'

https://socialist-alliance.org/elections/put-the-big-four-banks-in-public-hands

You were saying?

Vic wrote on Aug 13^th, 2016 at 7:55pm:

Sir Grappler Truth Teller OAM wrote on Aug 13th, 2016 at 6:34pm: Bam wrote on Aug 13th, 2016 at 6:15pm: Sir Grappler Truth Teller OAM wrote on Aug 13th, 2016 at 5:54pm: I'm just sitting back watching the fun develop over the long-held-to-be sacred cows in this society.... and how they've feathered their fine position of Entitlement ™ into a massive little earner for no effort. Regulate the bastards. This endless pursuit of greater and greater profit at the expense of the end user only causes never-ending upward pressure on incomes and wages etc, and thus massively contributes, not only to our 'lack of competitiveness', but also to rising unemployment, and hidden inflation. Rampant capitalism is of no real value to any society, and needs to be controlled by regulation, and for far too long this country has been nothing but the pawns in the hands of the gluttonous greedy. Might make their shareholders happy in the short term, but in the end those shareholders are equally engulfed by the evils it creates. Or we could abolish limited liability. Anyone who receives profit from corporations should also act as guarantors for that corporation's conduct and be liable for the losses. No more of this nonsense of privatised profits, socialised losses. Losses should also be privatised. Yes - you  own the corporation/company - you ARE the corporation/company when it fails or mis-behaves.  Your contribution to rectifying the corporation/company's problem is proportional to your shareholding. If Regina Rhinegold owns 51% of shares and the company fails - she pays 51% of its debts.  If Jo Bloggsana owns 0.05% of its shares - she pays 0.05% of its debts.  That money doesn't disappear, and is held somewhere... let those who benefit and have benefited pay..... Isn't that basically how Lloyds of London works/worked?

Umm - sounds right... not sure..... please explain?  Is this with ship insurance and cargo insurance?

There are some things I have no idea about....... and I am good at winging it....

lee wrote on Aug 13^th, 2016 at 8:29pm:

Bam wrote on Aug 13th, 2016 at 6:12pm: That's a straw man. The problems with the banking industry have only become apparent when the Coalition were in office. Why are you refusing to admit that the Coalition have done nothing useful to fix this? Labor have a very clear policy of making the banks accountable with a Royal Commission. Why are you not acknowledging this? You really should take off your blue glasses and take a look at the real world sometime. 'Moreover, the major banks pocketed an additional $3.7 billion in profits in 2012 as a direct result of refusing to pass on recent falls in official Reserve Bank interest rates to home loan borrowers. The banks’ profit levels are running at around $310 million a month higher than they would have been if the cuts were passed on in full, the Australia Institute reports.' https://socialist-alliance.org/elections/put-the-big-four-banks-in-public-hands You were saying?

And again you duck the question. Your refusal to address the Coalition's inaction is getting quite comical in its desperation.

I'll ask again, since you seem a little slow: Why are you refusing to admit that the Coalition have done nothing useful to fix this?

Bam wrote on Aug 13^th, 2016 at 8:36pm:

And again you duck the question. Your refusal to address the Coalition's inaction is getting quite comical in its desperation. I'll ask again, since you seem a little slow: Why are you refusing to admit that the Coalition have done nothing useful to fix this?

You really do have a cognitive deficit don't you.

lee wrote on Aug 13^th, 2016 at 5:52pm:

So you freely admit Labor were in for six years and did nothing. Thank you, it proves my point ... politicians are hopeless.

That is politicians of all sides. I'm not picking on Labor. Toughen up buttercup.

BTW nice  attempt at deflection. ;)

lee wrote on Aug 13^th, 2016 at 9:04pm:

That is politicians of all sides. I'm not picking on Labor. Toughen up buttercup.

and yet I've noticed that you only ever mention labor, while making some generic comment that may or may not encompass the libs :D :D

John Smith wrote on Aug 13^th, 2016 at 9:18pm:

lee wrote on Aug 13th, 2016 at 9:04pm: That is politicians of all sides. I'm not picking on Labor. Toughen up buttercup. and yet I've noticed that you only ever mention labor, while making some generic comment that may or may not encompass the libs :D :D

Don't knock it, it's a start!

John Smith wrote on Aug 13^th, 2016 at 9:18pm:

and yet I've noticed that you only ever mention labor, while making some generic comment that may or may not encompass the libs

Maybe you missed this -


lee wrote on Aug 13^th, 2016 at 3:15pm:

Sir Crook wrote Today at 1:09pm: Labor opposition leader Bill Shorten blasted the "greed" of the sector for its interest rate decisions, which he said was the result of executives looking out for themselves in a "fat cat" bonus system.  Yes Mr Shorten maybe you and the Greens are right.   Sad    Yeah, it is only a recent phenomenon.

I was responding to a specific claim. But I guess that is too hard for you to comprehend.

lee wrote on Aug 13^th, 2016 at 9:39pm:

I was responding to a specific claim. But I guess that is too hard for you to comprehend.

no, I can comprehend just fine

I have rarely, if ever, seen you say anything negative about the libs except in the most generic terms, whilst almost always crying about the ALP. Then when called on it you always say 'I meant all of them'.

It doesn't wash with me.

lee wrote on Aug 13^th, 2016 at 9:04pm:

Bam wrote on Aug 13th, 2016 at 8:36pm: And again you duck the question. Your refusal to address the Coalition's inaction is getting quite comical in its desperation. I'll ask again, since you seem a little slow: Why are you refusing to admit that the Coalition have done nothing useful to fix this? You really do have a cognitive deficit don't you. lee wrote on Aug 13th, 2016 at 5:52pm: So you freely admit Labor were in for six years and did nothing. Thank you, it proves my point ... politicians are hopeless. That is politicians of all sides. I'm not picking on Labor. Toughen up buttercup. BTW nice  attempt at deflection. ;)

It's not a deflection (but your post is). Again, you have refused to answer the question. I'm pointing out your clear inability to post anything critical of the Coalition. 14 years of Coalition governments doing nothing about the banking scandals including the current government ... and yet your only specific criticism is to whine about LABOR - the only major party that actually has a policy in this area.

You're doing this because you know your beloved Coalition's record in this area is pathetic. There's been clear evidence of malfeasance in the banking industry for the past three years, and the Coalition did ... NOTHING. And their latest effort? Inviting a few bankers to Canberra once a year for a chin wag. ;D Yeah, a fat lot of good that's going to do. Face it: a government led by a former merchant banker is not going to do a single thing to stop the scandals in the banking industry. It's going to be left to Shorten and Labor to clean up the Coalition's mess again with a Royal Commission into the banking industry when they are next in office. REAL action.

Bam wrote on Aug 13^th, 2016 at 11:22pm:

lee wrote on Aug 13th, 2016 at 9:04pm: Bam wrote on Aug 13th, 2016 at 8:36pm: And again you duck the question. Your refusal to address the Coalition's inaction is getting quite comical in its desperation. I'll ask again, since you seem a little slow: Why are you refusing to admit that the Coalition have done nothing useful to fix this? You really do have a cognitive deficit don't you. lee wrote on Aug 13th, 2016 at 5:52pm: So you freely admit Labor were in for six years and did nothing. Thank you, it proves my point ... politicians are hopeless. That is politicians of all sides. I'm not picking on Labor. Toughen up buttercup. BTW nice  attempt at deflection. ;) It's not a deflection (but your post is). Again, you have refused to answer the question. I'm pointing out your clear inability to post anything critical of the Coalition. 14 years of Coalition governments doing nothing about the banking scandals including the current government ... and yet your only specific criticism is to whine about LABOR - the only major party that actually has a policy in this area. You're doing this because you know your beloved Coalition's record in this area is pathetic. There's been clear evidence of malfeasance in the banking industry for the past three years, and the Coalition did ... NOTHING. And their latest effort? Inviting a few bankers to Canberra once a year for a chin wag. ;D Yeah, a fat lot of good that's going to do. Face it: a government led by a former merchant banker is not going to do a single thing to stop the scandals in the banking industry. It's going to be left to Shorten and Labor to clean up the Coalition's mess again with a Royal Commission into the banking industry when they are next in office. REAL action.

Good point.....

Bam wrote on Aug 13^th, 2016 at 11:22pm:

t's not a deflection (but your post is). Again,

You are the ones trying to re-write history. ;)