Time for Glass-Steagall legislation in Australia

http://cecaust.com.au/main.asp?sub=Glass-Steagall&id=Why_Aus_needs_GS_separation.html

As I understand it, Shorten has rejected the idea of Glass Steagall legislation in
Australia. Could the very reason Turnbull was placed in power be to also reject
Glass Steagall....after all he is a banker and Goldmann Sachs wanted him in the job
before the sh!t hits the fan later this year....ask your mate at the pub...no, better not..
...most australian peasants wouldnt know what GS was....

 

I can not believe I am saying this but I fully agree with the OP and the CEC.

Banks need strong regulation and an Australian Glass Steagall Act would certainly lower the risk of a major bank collapse.

 

I see... You would rather protect the interests of banks to continue to do what they wish.

First of all, are you supportive of capitalism or are you supportive of Marxism??? If we could get that out of the way I am sure we could discuss this point in rather more interesting light.

However, Australia’s laws and regulations, when it comes to banking, are set out to protect the interests of the customer NOT the banks. So while you are asking the question of protecting the banking industry in Australia, you need to decide if you wish the banking industry protection to continue to allow BAD policy and far riskier endeavours with everyday customer’s funds.

If you wish to take example of what the US are doing to the banking industry, remember this: Australia has far different financial legislations. Where the US protects nothing of the everyday bank customer Australia focuses ALL its protection on the everyday depositor…

 

Im suggesting that GS legislation be implemented in Australia....
The Glass-Steagall Act is aimed to separate commercial and investment banking so securities firms, which own or control regular banks, cannot use depositors' savings to fund speculative investment in financial markets.
I think that's protecting customers, don't you think....

 

No, all you are doing is demanding the banking industry be regulated to use the depositors funds in methods “you” demand them too. In Australia the big four are accountable for the failure of speculative investment unlike any other nation in the world. Also everyday public have further protections in the deposit guarantee which is a regulation that the bank sets aside a considerable amount of the depositors funds in the unlikely event that bank is to fail… That is to say, the bank can fail (as there are no protections for the bank) but the punters deposits are protected and payable UNLIKE the US system where the bank has far less regulation to protect the public from failure.

If you consider the point of the article that the GFC caused the banking industry to be bailed out, How do you consider that introducing such legislation would protect the world from the actions which produced such a result??? Do you think believe that bad lending criteria to the general public would not have continued???

Further, Australia is in the enviable situation that due to accountability of the banking industry and demand for safety of the general public’s money assuredly puts the Australian industry ahead of the rest in many ways.

So, simply demanding regulation to protect something that is already protected by demanding the big four banks set aside money for just such a purpose, is simply making regulation for the sake of it. The fact is that this regulation actually does NOTHING to protect the customer as it does nothing to address BAD investments just makes sure the investment is not consistent with anything deemed by government as ‘Speculative investment’.

Just one more thing, when you consider what “speculative investment in financial markets.” One has to ask, just what do you think banks should do with the depositors funds??? Stick it in the bank??? After all, the poor old mum and dad mortgage will not be granted as they are a ‘speculative investment in a financial market???’

Really, just what is the goal you wish to achieve??? For sure, it is not protection of deposited funds….

 

So, in a nutshell, you are saying that our banks are safe, and so are our deposits....

 

No, I am saying in Australia the everyday punters deposits are safer than any other nation in the world. As I originally asked, why do you think protecting the interests of the banks will suddenly make the industry safe??? I am also saying that regulation that does nothing to protect the punters interest, which are already regulated for is simply stupid.

As this type of legislation does nothing to make deposits safer due to the fact it addresses only what investments cannot be made with certain funds and does NOTHING to address poor financial management (which is what you think it does) is nothing senseless regulation…

 

So, theres no chance of a "bail-in" in Australia....

 

Again, who are you trying to protect??? The banks??? or the customers???

Again, do you believe in a capitalist system or a communist system???

Many things can be done, the question is SHOULD IT???

 

The customers will never have protection, as they will always be unsecured creditors...
I wish we had more protection...but we haven't...

http://www.cecaust.com.au/bail-in/A...e_why_did_CBA_need_910_million_in_a_hurry.pdf

 

I posted this some time ago....its even more relevant now, as Hockey had it included in his Budget...

https://barnabyisright.com/2013/04/...-cyprus-style-theft-of-bank-deposits-in-2010/

 

You are aware of the depositors guarantee??? At present this looks more like one of those situations where you have little understanding of what you’re talking about…

Well I think you should read the article before you provide it as support...
For starters, clearly you do not understand that the banking.

Due to the fact you do not LEND the bank your money …

Secondly, as I continually point at, the big four banks have to retain a percentage of ALL deposits to for the purpose of protecting the public deposits which is regulated by the Reserve bank. This percentage has been deemed large enough to ensure the safety of the deposits of everyday customers and NOT the commercial depositors that Rudd guaranteed during the commencement of the GFC.

No, if you read the link you provided it is about the BAD advice that the CBA provided to those self-funded and mum and dad investors you claim you think you are protecting. The fact is the legislation you claim to be good for this purpose does NOTHING in this circumstance and provides no assistance. Simply inferring it some protections is simply wrong.

 

Phew, Im glad everything is going to be ok...and the depositor guarantee, even though only up to $250 (with strings attached) will be honoured by our Government.....Im going to sleep a lot better tonite with all that Ive learnt from you.....
"You do not lend the Bank your money....".....oh yes you do...that show how little you know.........
Read Vern Gowdies book "End of Australia" and James Rickards book "The Big Drop" and you will
have a different opinion on banks......

 

Well isn't that interesting??? You point to the government guarantee and pretend it is the bank deposit guarantee to be sarcastic. Clearly, further demonstration of not understanding the banking industry in Australia but pretending different.

Again the funds are provided by the bank in retained funds deposited with the reserve bank and managed in crisis BY the reserve bank of Australia. The governments guarantee is separate again. One of the most constant arguments of the banks and the reserve bank is the size of this regulated fund.

But hey, if you wish to continue with sarcasm, be my guest.Unfortunately, you will need to know more about the Australian financial system to make that tact work for you...

 

Hey...Im done...Ive seen others on this forum argue with you to no avail....
Personally I wouldnt trust the banks or our politicians as far as I could throw them....

https://barnabyisright.com/2012/03/15/the-bank-deposits-guarantee-is-no-guarantee-at-all/

 

Yes, but that is simply because I choose what fight to fight. Also, the fact that on the odd occasion I am found to be lacking I do admit such. IF you are lacking, NOT MY ISSUE.

I must say though, you don't trust banks and politicians yet you are asking to introduce laws that put far more control by politicians over your personal financial situation while (I gather) you wish to allow banks to weasel out of regulation to protect the everyday depositor. That is extremely interesting and frankly weird...

 

I'm in favor of transparency and an educated consumer.
If an individual wants to put their money in a riskier bank with higher interest rates, they should be able to do that. The only concession should be that the risky bank should have to inform their customers their accounts are not considered safe by government authorities. And the government should not have to be providing insurance to these risky investments. Perhaps it would be more appropriate to put a little tax on the common accounts in risky banks, to compensate for them being outside of the mandatory insurance scheme (so as not to give them an unfair advantage relative to the regular low-risk bank accounts).

This still gives the consumer choice, and informs them that their choice may be risky. What I am not in favor of is the government assuming the risk for risky investments. If the high-risk bank accounts fail, they should be allowed to go bankrupt, and the customers will lose all their money.

 

I'm not well versed in the ins and outs of banking policy. But I do seem to remember that during the GFC one of the reasons we didn't go down the plughole was that we have a regulated banking system - as does Canada which I think also avoided that plughole. All good so far.

What I don't like is the sociopathic behaviour of the banks. But they're no different to any other money-making organisation in being sociopathic. We've seen plenty of evidence of bad behaviour and it should be stopped and the individuals perpetrating it should be punished.

As JF pointed out, education would be good. This is something else we are just going to have to load up our poor schools with. Basic financial literacy. Most of us are thick as a brick when it comes to finance. We need to be protected from ourselves (yes I wrote that) and protected from the sharp practices of those in the finance industry that are so easily able to fool us. Because we can't trust them to be ethical we have to make sure they are ethical or else. And we have to cure our own ignorance..

 

This sort of thing just makes me angry, I can see why Turnbull would reject it, but Shorten also? Glass-Steagall legislation makes sense and I want to know their reasons why? Does anyone know why they rejected it?

 

"But. But. But...
We can't regulate banks and..and..capital!
It's wrong!
It's unnatural!
We've already got this runaway democracy train going on!
Look at what they did last Saturday: we done told em and told em they needed stability, didn't we Bill?"
"Yes Mal"
"Geoff Harvey was right. Democracy's broken. It's out of control! The sooner we have a dictatorship like China the better. *These people! They will just wreck the country! What will the Market say? The sooner educated, right minded people take over from these people, the better!"
" I know, Mal"

* these people = the Australian people.
(Or the British people if we were talking about Brexit)

 

It has its good points. It's like watching someone play twister.

 

It sounds good but how do we get to transparent, democratised banking by educated customers from four too big to fail banks who are constantly found to have committed big money malfeasance on ordinary working people but are never called to account?

How do we make them serve us when we serve them? Personal debt is 186% of GDP . The banks hold 80% of Australian residents assets.

 

Some suggest the Banks are loaning paper money they don't have in gold assets. Maybe a Royal Commission into the banking industry would uncover this fraud.

 

I agree, we need this immediately. This however is only one small step. We need to look at the structure and behavior of industries that supply essential goods and services. I don't think that we should advantage our Market over overseas ones, tariffs etc, but we can do it by stealth. The government can control R&D, staffing levels, in-house education etc by tax benefits, grants and incentives etc.

We should outlaw companies from establishing national chains, instead encouraging financially district level business and allowing them to form national level bodies. Examples. IGA, Harvey Norman, Mitre 10. Franchises should also be encouraged but tighter regulations should be enacted and individual franchises should be allowed more freedom within a limit to ensure continuity.

Why restrict it to regional? This allows the organisation to provide a better service to every community, more tailored to their needs rather then being controlled centrally by corporate boys in a capital city, very removed from their customers.

 

Very true, we should never have change the bank, which bank? Yes that bank, the Commonwealth Bank from what it was created to be and was for a long part of our history. The peoples bank, the regulator, the "boss" bank. We can work out something similar today if we put our minds to it.