Banks 'need to be pulled into line'
May 23, 2012

   




THE head of one of the nation's biggest unions believes Australian banks should be forced to mirror the movements of Reserve Bank interest rates when setting their own lending rates.   

Paul Howes, national secretary of the Australian Workers' Union, said the nation's banks were operating like ''a de facto cartel'', gouging customers. His comments came as National Australia Bank chief executive Cameron Clyne gave up the argument that overseas costs were what made the banks not pass on all of the rate cuts handed out by the Reserve Bank. ''What is happening in Europe is not having an impact on our cost of funding,'' he said. He pointed instead to the competition to attract deposits by offering the best rates.

Speaking at the National Press Club yesterday, Mr Howes said it was time for an ''active'' Commonwealth government to ''pull the financial services sector back into line''.


He asked why banks felt they could brazenly ignore Reserve Bank rate cuts when they were simultaneously reliant on the federal government to licence them. The Reserve Bank cut the official cash rate by 50 basis points this month, but retail banks on average passed on 37 basis points of the reduction to customers.

''That the banks have declared their independence from the Reserve Bank of Australia, and said effectively that we will ignore [those] policy settings … means the current system isn't working,'' Mr Howes said.

Mr Howes said it was time the government put an end to ''the protection racket that allows banks to record massive profits while sacking staff and gouging consumers''.   

Banks last night questioned whether Mr Howes' comments were intended to distract from other issues surrounding the union movement.


    Commenter
        Hawker
    Location
    Date and time
        May 23, 2012, 8:05AM

        I agree. Banks provide an essential service to our economy with fractional reserve lending and fund creation. However, they are playing us all for fools with this continual line of "if you DON'T LET US DO WHATEVER WE WANT WE WILL GO BANKRUPT AND AUSTRALIA WILL CRASH AND BURN, I SAYS, BURN AND BE CONDEMNED TO FUNCTION LIKE A THIRD WORLD COUNTRY!!!!1111"   

        Banks function just fine overseas without gouging their customers for the sake of their shareholders. A government that steps up regulation to protect customers and staff just encourages innovation: the banks will have to find new, creative ways of making profit that don't treat customers and staff like annoying barriers to profit or cash cows.   

        Don't buy into all that fear crap.

    Commenter
        Asynca
    Location
    Date and time
        May 23, 2012, 8:19AM


Read more: http://www.theage.com.au/national/banks-need-to-be-pulled-into-line-20120522-1z394.html#ixzz1vdpZX5mf

You should have watched the press club.   

I wonder how many jobs have gone due to the carbon tax?.  ( That hasn't started yet. )    

bobbythefap1 wrote on May 23^rd, 2012 at 9:37am:



Such as?
Name me a country that isnt a dictatorship that has pulled their banks into line.

Quote:

BANKS RUN ECONOMIES SO THIS IS A SERIOUS ISSUE!!

freediver wrote on May 23^rd, 2012 at 9:01pm:



What about the new 5th pillar?

http://www.smh.com.au/business/bankers-beware-fifth-pillar-on-its-way-20101201-1...


Quote:

Bobby. wrote on May 23^rd, 2012 at 9:38pm:




Bump to FD

bobbythefap1 wrote on May 24^th, 2012 at 10:58am:


DRAH has still got its capitals on……