In economic times like this, I think a very real solution at this stage would be to regulate banks with a profit cap. This would ensure that corporate organisations like these guys, who actually control our very financial outlook help in stimulating the economy via relief for mortgagees. It would pertain to Australia where interests rates are one of the highest in the world. Banks have still made record profits while most of the country is struggling, not withstanding those associated directly with the mining boom. The American economy was destroyed by corporate greed, which obviously wasn't regulated enough to protect the country against a financial meltdown. Free market capitalism can survive with regulation at appropriate times, especially in the instance where the point of equilibrium isn't existent, and in this instance banks have the consumer over a barrel. There are obviously other factors to consider, such as shareholders and investors. At what point is the interests of everyones survival considered over the interests of the top end, who are still going to walk away with much more than those just trying to survive by providing the basics for their families.
They should just make it easier to transfer homeloans and savings, from one bank to another. A "profit cap", whatever that is, is unnecessary.
Its quite clear that private banks dont care about the Australian economy and in that case Australians. the RB passed the cut for a reason and that is to stimulate our economy. Banks by holding back to me anyway means they couldn't care less whether our economy is healthy or not. More reason to have a government owned bank like the commonwealth used to be. When the RB of oz passes a cut the government owned bank would pass it on verbatim. Then my fellow aussies who would you bank with especially if you had a mortgage. An Australian owned bank would indeed stimulate competition and force these leeches to also drop their rates in their entirety.
You're absolutely right dumb, but the same can be said for those other corporate bodies such as mining companies.
I agree, but the reserve bank drops its rates so the commercial banks can do the same, giving consumers that little bit etra to spend (stimulate the economy) or just save. If the commercial banks donot pass on this rate cut they are denying Australians the opportunity to stimulate our economy. I say Australia should have its own government owned commercial bank. That will fix this problem, because a government owned bank would pass on the interest rate cut stright away. making the ANZ's etc etc follow. Otherwise like Swan suggests take a walk.
HEAR HEAR. Another outstanding post D&D, and couldn't agree more. The selling of the Commonwealth bank into privatisation didn't create competition like these scummy politicians claimed it would; it created a monopoly whereby the people are trapped. A bank owned by the people "would" create competition.
An irredeemable currency which you are required by law to accept at face value and which cannot be competed with can hardly be the basis for a "free market." There's nothing free about the banking system in the US or Australia, even if the central banks are in private hands. It's a system designed to serve greed, and more regulations will just enable more greed and gather more wealth in the hands of the politically connected.
Banks are greedy .... Well you learn new things every day reading these forums. Someone also mentioned that other big companies are greedy, well I'll be.... We ARE ALL greedy, that's the big problem ....
The banks have somehow lost their natural business, which is ultimately to lend money to people and other businesses. Now what they are doing the most, is to play on the share market and invest each in other. The lending is generally considered "dangerous" and loans are increasingly difficult to get by. Yes, they are greedy and are working for the interests of their shareholders. Unfortunately that puts a big brake to the economy and what it gets into the red zone, the banks come as generous "saviours", put a few dollars on the table and sometimes get hands on collapsing businesses for next to nothing. What I consider as the most outrageous of all, are the bonuses and salaries of their senious stuff. The boss of one of the four big banks alone gets paid annually as much as the people of a medium-sized town in the country all put together. And that is without the bonuses (which are for what???).
