Comments on: A People's Bank for Australia?

By: John Kemp

John Kemp — Sat, 15 Aug 2009 13:17:04 +0000

There is a groundswell of people within the electorate who are Campaigning fro a Peoples Bank Of Australia. This movement is snowballing becausr the Commonwealth Bank was so successful for the benefit of the taxpayer before it was Privatised by the right wing of the Labor Party Prime Minister Paul Keating this become his undoing. The Peoples Bank Of Australia would not be so expensive as the Conservative critics claim. It would be initiated by Australia Post creating more employment for Post Office workers. Most transactions would happen on-line with new software and all postage would be free for subscribers by posting cheques and transfer forms. It would be fashioned on the same lines as the British National Giro. This was established by Tony Benn when he was Telecommunications Minister, So lobby your Members of Parliament and Senators for the objective of keeping the current Banks honest.

By: Sally Milton_Ellis

Sally Milton_Ellis — Thu, 23 Jul 2009 02:01:23 +0000

I read this with interest and have to admit to some degree some of the discourse was over my head. However, one thing that is clear is that people need more for a VOICE. I found this site and it has user generated reviews that allow US the customers to voice our concerns: http://mozo.com.au/savings-accounts

Other than this how about if there was a site similar to http://www.wikileaks.org but for the local banking industry that would allow insiders to leak information to keep the banks honest.

By: paul chapman

paul chapman — Sun, 12 Jul 2009 05:19:51 +0000

Interesting discussion on banks. I have been doing some research on old 20′s figure who wrote on what he called Cartesian Economics, turns out to be one the founders of ecological economics. Lots of highly useful basic insights into workings of finance. Worked hard to upgrade my knowledge (+4 months work)have concluded the information I have gained would be an excellent primer for public discussion. Missed Griffith review deadline for issue 25, any suggestions where I could try and get it published? I have no financial or institutional support. Is there any non-academic,inter-disciplinary organ that will consider 3000 words on such a topic?

By: furious balancing

furious balancing — Sat, 11 Jul 2009 09:55:29 +0000

An Aboriginal friend of mine asked me to take him to the TAB omce, I was running really late and had a bit of a gripe about his need to place a bet not being a huge priority..and he said, “nah, I need to transfer some money to Joe [his son]“, so I took him to the TAB and he did indeed transfer some money…he gets back in the car and says, “see..no fees, no queues and open longer hours, don’t let anyone tell ya blackfellas aren’t cluey”. At the time I was paying a dollar for every interbank transfer I did, .50 for BPAY, plus monthly account keeping fees etc etc at my credit union…I was pretty surprised.

By: Ginja

Ginja — Sat, 11 Jul 2009 05:03:32 +0000

Isn’t one of the lessons of the GFC that we need a staid, boring – most importantly safe – financial sector. State Banks got in trouble because they got swept up in the deregulation culture of the ’80s and started aping the commercial banks. It’s largely forgotten now, but all banks got in trouble in the ’80s (perhaps that’s one reason they aren’t in so much trouble now).

The financial sector is so large now – larger than it needs to be to fulfil its role of providing capital to the broader economy – surely they handle a little bit of competition from the public sector.

And there could be a social justice aspect to all this: what about all the people out there who just want no-frills banking and don’t want to pay for advertising and all the rest?…or to subsidize lending terms for the wealthy, as happens now.

By: Katz

Katz — Fri, 10 Jul 2009 01:36:50 +0000

From Mark’s post:

How long until the Government is again confronted with one of the banks unilaterally raising interest rates, particularly for business lending? The problem of Australia’s banking oligopoly needs a long-term solution.

It is true that Rudd has thoroughly implicated the state and taxpayers in the survival of a select and powerful sector of the Australian banking system. This state of affairs exists around the world. The Australian government was a late adopter of this policy. So far as I can see, the Rudd policy has bipartisan support.

Did the Rudd government expect some kind of quid pro quo from the banking oligopoly of its own creation? I am unaware of any agreement, either explicit or implied, along those lines.

Currently the world is experiencing financial deleveraging unknown since the Great Depression. Funds available for borrowing are scarce and expensive.

In such a situation, a “people’s bank” (really a state capitalist enterprise) may be able to attract depositors and therefore accumulate capital at a cheaper rate than the large banks. Such a bank may be able to lend at a cheaper rate.

It is possible, though unlikely, that current dire worldwide financial conditions will persist for a long time. When these conditions improve, banks will be able to borrow at cheaper rates, perhaps cheaper than a “people’s bank” will be able to borrow at from mums and dads. When and if that happens, a “people’s bank” will be forced onto world capital markets just like regular banks. Under those conditions, there is not much to distinguish a “people’s bank” from an oligopoly.

The biggest crisis for a “people’s bank” arrives when it gets into financial trouble. The State Bank of NSW was mentioned above, and the State Bank of Victoria was an egregious example in the 1980s. Under those circumstances political and commercial considerations become seriously entangled.

But of course that entanglement is exactly what has happened worldwide in the aftermath of the GFC.

No mainstream political parties complained about that entanglement, which proves that there are few neoliberals in the foxholes.

By: kingsley

kingsley — Fri, 10 Jul 2009 00:05:51 +0000

Danny – interesting and thinking about it more myself another major offender is the managed funds industry who actually might be worse than the banks.

By: Andrew Reynolds

Andrew Reynolds — Thu, 09 Jul 2009 13:26:40 +0000

Elise,
…and the credit risk premium you were charged would have been low (I hope). Compare your rate on that to a credit card and you should see what I mean.

By: Danny

Danny — Thu, 09 Jul 2009 12:38:22 +0000

“Name another industry where they get to charge serious money just to become a client/customer and even worse charge you something if you elect to leave”…
Not sure what counts as ‘serious money’ but phone companies/ ISPs … ? I gather I’m about to be charged a “porting out” fee when I change my mobile provider.

By: kingsley

kingsley — Thu, 09 Jul 2009 09:50:03 +0000

What they need to ban in banking to get competition going is all establishment and exit fees. If someone decides to use say a different accountant the new accountant doesn’t charge you a fee just to meely become a client and the old accountant doesn’t get to sting you for leaving.
What stops most people from switching banks even when they are massively annoyed is they do the sums of switching and it is prohibitive. Especially when you start to involve significant loans. Likewise Govt’s need to remove any stamp duties on loans that are just switches of banks not genuine new borrowings.

Can anyone name another industry where they get to charge serious money just to become a client/customer and even worse charge you something if you elect to leave?

These types of fees are massively anti-competitive.