Banks - GRRRRRRRRRRRRRRRRRRRRRRR

[Liverpool]

NAB reduced by 20 basis points. clark kents.

so businesses should have no moral obligation to society?

No.

Their obligation is to abide by the laws and from within these boundaries, do the best they can to make money to reward investors and shareholders.

We're talking about about multi-billion dollar businesses here...not the local fairy-floss factory on Ice-cream Island.

 

[Disco08]

Multi-billion dollar businesses have far more scope to help people than the local fairy floss guy. No one's asking them to stop making substantial profits.

 

[Liverpool]

Multi-billion dollar businesses have far more scope to help people than the local fairy floss guy. No one's asking them to stop making substantial profits.

So you want to cap profits then?

 

[MB78]

Money rorted by profiteering banks can not be used in other areas of the economy - so if I pay more servicing the debt on my mortgage, I have less discretionary spending for retail and other services. So this kind of profiteering actually has a negative effect on the rest of the economy.

Banks pay tax and dividends which is used in the economy so your comment is incorrect.

 

[Tigerdog]

Join a credit union.

 

[Disco08]

So you want to cap profits then?

Not at all. I'd like legislation on interest rates to take into account the population's ability to afford the subsequent repayments. Any effect on bank's profits wouild be purely coincidental.

 

[Liverpool]

Not at all. I'd like legislation on interest rates to take into account the population's ability to afford the subsequent repayments. Any effect on bank's profits wouild be purely coincidental.

The legislation you talk about would suit people who don't want to take any responsibility for their own financial insecurities.

If people can't pay the subsequent repayments, then I wouldn't be questioning the banks and whether they should have moral obligations or not.

I'd be questioning the people themselves for borrowing that much to begin with.

Anyway, with an alcopop tax, a flood levy, a mining tax, and a carbon tax....I'm sure Gillard/Swan can come up with something to try and distribute the money across the board and reward irresponsibility out there.

 

[Giardiasis]

Money rorted by profiteering banks can not be used in other areas of the economy - so if I pay more servicing the debt on my mortgage, I have less discretionary spending for retail and other services. So this kind of profiteering actually has a negative effect on the rest of the economy.

 

[Lidsand]

Join a credit union.

CU's also help the banks profit. in order to provide a service to their customers they rely on the big 4 as agents for over the counter transactions and subsequently pay them a commission

 

[Disco08]

The legislation you talk about would suit people who don't want to take any responsibility for their own financial insecurities.

If people can't pay the subsequent repayments, then I wouldn't be questioning the banks and whether they should have moral obligations or not.

I'd be questioning the people themselves for borrowing that much to begin with.

Anyway, with an alcopop tax, a flood levy, a mining tax, and a carbon tax....I'm sure Gillard/Swan can come up with something to try and distribute the money across the board and reward irresponsibility out there.

It's simple maths. If the median house price is X and basic cost of living expenses are Y, median incomes need to be sufficient to cover those costs. Do you think that's the case right now?

 

[AngryAnt]

Banks pay tax and dividends which is used in the economy so your comment is incorrect.

If the amount of dividend paid back to shareholders (those in Australia at least) is equivalent to the amount of extra money extracted through mortgages being paid at the higher rate, then I would be incorrect. It isn't. But regardless, would you prefer to spend (say) an extra $400 a month on interest repayments or have that money to spend on whatever else your family needs.

There are many reasons why higher interest rates have a negative effect on the economy. CBF going through them now, but one of the main reasons is that lower interest rates spur the economy by making it easier for companies to borrow money for capital expenditure and individuals/families to borrow for housing or for other reasons. We spend more, economy benefits.

 

[AngryAnt]

Only governments can create monopolies. Baloo is bang on the money.

I said an oligopoly, not a monopoly. I also said inadequate regulation.

You libertarians are all the same - the market is perfect, but when it fails, it's always the government's fault. When corporations behave in as cartels, it's the government's fault not the cartel's fault. Sing a different tune, that one's getting old.

 

[MB78]

If the amount of dividend paid back to shareholders (those in Australia at least) is equivalent to the amount of extra money extracted through mortgages being paid at the higher rate, then I would be incorrect.

How about you read your original post again and explain how it is correct. As you didn't state the above which I agree with.

Now with your economic smarts you must know the banks are under pressure to keep their current credit ratings. If they get downgraded the whole economy suffers as our funding costs to borrow overseas will increase.

 

[Tigers of Old]

Might as well do away with the Reserve Bank.

 

[Giardiasis]

I said an oligopoly, not a monopoly. I also said inadequate regulation.

You libertarians are all the same - the market is perfect, but when it fails, it's always the government's fault. When corporations behave in as cartels, it's the government's fault not the cartel's fault. Sing a different tune, that one's getting old.

Effectively the same thing. Regulation puts costs on business' that the small guys can't afford, and hence the big guys take over.

 

[Giardiasis]

Might as well do away with the Reserve Bank.

Needs to happen.

 

[Giardiasis]

There are many reasons why higher interest rates have a negative effect on the economy. CBF going through them now, but one of the main reasons is that lower interest rates spur the economy by making it easier for companies to borrow money for capital expenditure and individuals/families to borrow for housing or for other reasons. We spend more, economy benefits.

Artificially lowering the price of money below the market rate creates massive distortions of capital in the economy, and sends the wrong signals to investors. It is the primary reason why the economy experiences large booms and busts.

 

[tigerman]

Just got back from Thailand, and had insufficient funds while we were away to do a monthly periodic payment from one of our accounts to another. (transfer) For the privilege, we got slugged a $9 fee.
Scum that's what they are.

 

[Brodders17]

at the risk of bringing in more regulation, would it be possible for a law to be introduced to say the banks have to reduce/increase their rates by whatever the reserve bank does within a certain time frame, then allow them to be free to change their rates as they like once a short time period has elapsed.

so using say the c'wealth bank, which i think has lowered rates by 20pts, for an example, they would have had to reduce their rates by 25pts, then after the short time was up they could have raised their rates by the 5pts they appear to think they need to remain profitable.
probably stating the obvious, but it appears the banks use interest rate cuts to increase profit. would they have raised their rates by the 5pts they have effectively shaved, which they claim they need, if the reserve bank did lower rates? this way any bank instigated rate changes are transparent.

 

[AngryAnt]

Effectively the same thing. Regulation puts costs on business' that the small guys can't afford, and hence the big guys take over.

Regulation can be a barrier to market entrants. But no regulation means more mergers/acquisitions/anti-competitive cartel like behaviour particularly in a small market like Australia. Small players couldn't compete at all and the oligopoly we now have would get stronger, not weaker.