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IMPORTANT // Please look after your loved ones, yourself and be kind to others. If you are feeling that the world is too hard to handle there is always help - I implore you not to hesitate in contacting one of these wonderful organisations Lifeline and Beyond Blue ... and I'm sure reaching out to our PRE community we will find a way to help. T.
Banks - GRRRRRRRRRRRRRRRRRRRRRRR
- Thread starter tiggytam
- Start date
A warning to anyone who has an ME bank account, there might be something wrong with your debit card.
Yesterday I purchased something at Coles, put my card in the machine to pay, and it just processed the payment without me pressing anything.
Not only that but I later found out it charged me twice for that one transaction, but it only showed up as one transaction on the receipt, so I didn`t realise I`d been charged twice until I looked at my online banking.
I also bought $30 phone credit on the internet with the same ME bank debit card and it charged me twice for that as well!
I also can`t get cash out at Coles Eftpos, or Westpac ATM`s.
I rang ME bank and they pretty much said I just have to wait to see if it fixes itself in a few days, if not, ring them back in ten days.
Not happy!
Yesterday I purchased something at Coles, put my card in the machine to pay, and it just processed the payment without me pressing anything.
Not only that but I later found out it charged me twice for that one transaction, but it only showed up as one transaction on the receipt, so I didn`t realise I`d been charged twice until I looked at my online banking.
I also bought $30 phone credit on the internet with the same ME bank debit card and it charged me twice for that as well!
I also can`t get cash out at Coles Eftpos, or Westpac ATM`s.
I rang ME bank and they pretty much said I just have to wait to see if it fixes itself in a few days, if not, ring them back in ten days.
Not happy!
Thought this article was pretty... interesting
http://www.theage.com.au/business/banks-laughing-all-the-way-to-the--bank-20130128-2dgw3.html
IT WAS with a silken touch that the government slipped the bank lobby's ''covered bond'' legislation through the Senate a little more than a year ago.
They are not so keen on covered bonds overseas. And while the prudential regulator APRA had protested that they favoured big creditors to the disadvantage of the mums and dads, the Reserve Bank, Treasury and the big banks won the day.
Now the evidence is in. Covered bonds have brought down bank costs even further. In a confidential note to its institutional clients, Westpac describes the fall in wholesale funding costs over the past year as ''extraordinary''.
No longer can the banks rely on that hoary old chestnut of ''high funding costs'' to pass off their failure to match the successive cuts in the official cash rate.
Margins are fatter than ever, veritably bulging, and there is scant proof that borrowers are getting their grimy fingers on a single cent of it. It's a good thing for shareholders though, some cautious at the listless growth in credit.
The story that the banks spin to their big clients, as opposed to the rest of us, is about as similar as the Chinese and Japanese perspective on who owns the Senkaku Islands.
While the public rhetoric has adamantly clung to the line that ''it's tough out there'', Westpac confides to the institutions that, over the past year ''the spread compression has been an extraordinary performance''.
In this month's missive to institutional clients, called Covered Bonds with the Institutional Bank, the cost of wholesale funding has halved over the past 12 months, from 120 to 60 basis points over the swap rate.
Covered bonds with a five-year maturity are fetching a 30-point premium to others. Yet the frustrating bit for borrowers is that, while all wholesale funding spreads ''continued to grind tighter'', the banks, in their habitual lock-step, recoiled from passing on the full cuts in the cash rate. It's down from 4.25 per cent to 3 per cent.
About $40 billion in covered bonds have been issued since October 2011 when the government bestowed the cartel with its latest legislative leg-up (the last of the sovereign guaranteed bonds, another freebie, are pricing 30 points better than the covered bonds).
Of the big four, the CBA leads the way with $15 billion of the roughly $40 billion on issue.
Looking back, in January 2005 the standard variable rate was 7.05 per cent (now 6.5 per cent) and the cash rate 5.25 per cent (now 3 per cent). Add a 30-point funding margin and you get to 5.55 per cent.
For the sake of comparison, then, there was a 1.5 per cent margin eight years ago. Today, the cash rate is 3 per cent, so the banks are paying 3.6 per cent for their money versus the standard variable of 6.5 per cent. This is the undiscounted rate mind you - most borrowers should be forking out 5.6 per cent - but we are comparing apples with apples here.
This 6.5 per cent minus the 3.6 per cent bond rate plus costs constitutes a margin of 2.9 per cent compared with the 1.5 per cent earlier. It is an increase of more than 90 per cent in eight years.
Another interesting point in the wholesale funding game - and now we refer to another document, the Westpac Institutional Bank Floating Rate MBS Revaluation Sheet - is that what the bank is telling its clients appears to diverge quite considerably from actual market prices.
This revaluation sheet assists institutions to price all fixed-interest products including RMBS (residential mortgage-backed securities) issued by the likes of AIM, Firstmac and Pepper.
Something peculiar is going on. According to contract notes that this reporter has seen, there are mortgage bonds, for instance, which Westpac values at $82 (yielding 9.2 per cent or 650 points over swap) that are actually changing hands at $87.
A Macquarie Bank valuation of the very same bond in January was $92.50.
This may be an extreme example, yet there appears to be a pattern of some banks pricing non-bank paper issued by their rivals below market value. Perhaps it's a matter for the ACCC.
The banks will contend, and plausibly, that the discrepancy comes down to liquidity.
It is quirky, though, that a covered bond of the same duration trades at just 60 points over swap versus 250 for its RMBS equivalent.
Both are covered by mortgages, both regulated by APRA, both enjoy a pristine history of default. The difference is that one is issued by a bank and the other by a non-bank lender, enhanced via a trust and insured by the likes of QBE or Genworth.
The bottom line is that, when it comes to the cost of funding, the non-bank lenders still can't compete as they did before the financial crisis.
And while the big banks have grown their market share to well over 90 per cent of new home loans in the past four years, they still command a margin of 2.85 per cent on that exquisite asset called an Australian mortgage.
Nice work if you can get it - but banking licences don't grow on trees.
Read more: http://www.theage.com.au/business/banks-laughing-all-the-way-to-the--bank-20130128-2dgw3.html#ixzz2JKQPPprU
http://www.theage.com.au/business/banks-laughing-all-the-way-to-the--bank-20130128-2dgw3.html
IT WAS with a silken touch that the government slipped the bank lobby's ''covered bond'' legislation through the Senate a little more than a year ago.
They are not so keen on covered bonds overseas. And while the prudential regulator APRA had protested that they favoured big creditors to the disadvantage of the mums and dads, the Reserve Bank, Treasury and the big banks won the day.
Now the evidence is in. Covered bonds have brought down bank costs even further. In a confidential note to its institutional clients, Westpac describes the fall in wholesale funding costs over the past year as ''extraordinary''.
No longer can the banks rely on that hoary old chestnut of ''high funding costs'' to pass off their failure to match the successive cuts in the official cash rate.
Margins are fatter than ever, veritably bulging, and there is scant proof that borrowers are getting their grimy fingers on a single cent of it. It's a good thing for shareholders though, some cautious at the listless growth in credit.
The story that the banks spin to their big clients, as opposed to the rest of us, is about as similar as the Chinese and Japanese perspective on who owns the Senkaku Islands.
While the public rhetoric has adamantly clung to the line that ''it's tough out there'', Westpac confides to the institutions that, over the past year ''the spread compression has been an extraordinary performance''.
In this month's missive to institutional clients, called Covered Bonds with the Institutional Bank, the cost of wholesale funding has halved over the past 12 months, from 120 to 60 basis points over the swap rate.
Covered bonds with a five-year maturity are fetching a 30-point premium to others. Yet the frustrating bit for borrowers is that, while all wholesale funding spreads ''continued to grind tighter'', the banks, in their habitual lock-step, recoiled from passing on the full cuts in the cash rate. It's down from 4.25 per cent to 3 per cent.
About $40 billion in covered bonds have been issued since October 2011 when the government bestowed the cartel with its latest legislative leg-up (the last of the sovereign guaranteed bonds, another freebie, are pricing 30 points better than the covered bonds).
Of the big four, the CBA leads the way with $15 billion of the roughly $40 billion on issue.
Looking back, in January 2005 the standard variable rate was 7.05 per cent (now 6.5 per cent) and the cash rate 5.25 per cent (now 3 per cent). Add a 30-point funding margin and you get to 5.55 per cent.
For the sake of comparison, then, there was a 1.5 per cent margin eight years ago. Today, the cash rate is 3 per cent, so the banks are paying 3.6 per cent for their money versus the standard variable of 6.5 per cent. This is the undiscounted rate mind you - most borrowers should be forking out 5.6 per cent - but we are comparing apples with apples here.
This 6.5 per cent minus the 3.6 per cent bond rate plus costs constitutes a margin of 2.9 per cent compared with the 1.5 per cent earlier. It is an increase of more than 90 per cent in eight years.
Another interesting point in the wholesale funding game - and now we refer to another document, the Westpac Institutional Bank Floating Rate MBS Revaluation Sheet - is that what the bank is telling its clients appears to diverge quite considerably from actual market prices.
This revaluation sheet assists institutions to price all fixed-interest products including RMBS (residential mortgage-backed securities) issued by the likes of AIM, Firstmac and Pepper.
Something peculiar is going on. According to contract notes that this reporter has seen, there are mortgage bonds, for instance, which Westpac values at $82 (yielding 9.2 per cent or 650 points over swap) that are actually changing hands at $87.
A Macquarie Bank valuation of the very same bond in January was $92.50.
This may be an extreme example, yet there appears to be a pattern of some banks pricing non-bank paper issued by their rivals below market value. Perhaps it's a matter for the ACCC.
The banks will contend, and plausibly, that the discrepancy comes down to liquidity.
It is quirky, though, that a covered bond of the same duration trades at just 60 points over swap versus 250 for its RMBS equivalent.
Both are covered by mortgages, both regulated by APRA, both enjoy a pristine history of default. The difference is that one is issued by a bank and the other by a non-bank lender, enhanced via a trust and insured by the likes of QBE or Genworth.
The bottom line is that, when it comes to the cost of funding, the non-bank lenders still can't compete as they did before the financial crisis.
And while the big banks have grown their market share to well over 90 per cent of new home loans in the past four years, they still command a margin of 2.85 per cent on that exquisite asset called an Australian mortgage.
Nice work if you can get it - but banking licences don't grow on trees.
Read more: http://www.theage.com.au/business/banks-laughing-all-the-way-to-the--bank-20130128-2dgw3.html#ixzz2JKQPPprU
I still very snakey at the $2 ATM fee. Was brought in during the GFC due to finance being allegedly in trouble (our banks weren't), and after taxpayers provided a guarantee to deposits. 5 years later, it hasn't budged. Bank profits through the roof. And how is the competition we hear so much about? No price fixing here. 50c would be fine, $1 I could handle, $2 a throw is gouging that was introduced by stealth.
Now listen here O brave Sir Eric, defender of the oppressed and downtrodden banks, if you're gunna adopt a tone like that, you should make sure you're correct.
You ain't. After the financial crisis the banks opportunistically lobbied the Commonwealth to allow more fees, they were still very profitable, particularly in the context of the GFC, but they successfully fanned the paranoia and their profits had dropped. The ATM caper os too boringly complex to go into here, suffice to say, there are bank and non bank ATMs. The bank ATM are outsourced to varying degrees,, from basic servicing up to contract supplied, I'm only worried about the bank ATMs here. The banks pocket different cuts of the fee, its a minimum of half, usually more. You really think a bank would allow someone to put an ATM in their front window and not take a cut? Nice one.
The second point is much easier to refute, and much dumber. Eric, are you honestly trying to argue that a government guarantee, or any guarantee is not worth money? Do you not pay more for an item that has a good guarantee? Do you think banks did not profit from garnering deposits based on offering a government guarantee in an uncertain environment? If the worst case scenario had happened, the government, us taxpayers, would have paid out any shortfalls.
What did the banks offer us taxpayers for this gold stamp show of loyalty, faith and largesse? An extra $2 fee on withdrawals from ATMs, amongst other fee increases. And the colluded to price fix when they did it, allegedly.
You ain't. After the financial crisis the banks opportunistically lobbied the Commonwealth to allow more fees, they were still very profitable, particularly in the context of the GFC, but they successfully fanned the paranoia and their profits had dropped. The ATM caper os too boringly complex to go into here, suffice to say, there are bank and non bank ATMs. The bank ATM are outsourced to varying degrees,, from basic servicing up to contract supplied, I'm only worried about the bank ATMs here. The banks pocket different cuts of the fee, its a minimum of half, usually more. You really think a bank would allow someone to put an ATM in their front window and not take a cut? Nice one.
The second point is much easier to refute, and much dumber. Eric, are you honestly trying to argue that a government guarantee, or any guarantee is not worth money? Do you not pay more for an item that has a good guarantee? Do you think banks did not profit from garnering deposits based on offering a government guarantee in an uncertain environment? If the worst case scenario had happened, the government, us taxpayers, would have paid out any shortfalls.
What did the banks offer us taxpayers for this gold stamp show of loyalty, faith and largesse? An extra $2 fee on withdrawals from ATMs, amongst other fee increases. And the colluded to price fix when they did it, allegedly.
tigersnake said:
The ATM owner can charge whatever fee they like. There is a simple solution to this though and that is go to an ATM owned by your bank and you will not pay any fee.
I was recently in America and they charge up to $35 for an ATM withdraw. Im sure you can spare $2 or walk an extra 100m down the road to your banks ATM.
Again you are blatantly incorrect with regards to these fees being a result of the GFC as the debate started as a far back as 2004 (well before the GFC)
tigersnake said:
The Government did not pay out a single dollar of tax payer funded money to the banks on the back of this guarantee. This is a fact and i am not sure how you can argue it?
Eric said:
I just did argue it, pretty clearly I thought. I'll try once more. Basically what the government, us, did was pay the banks insurance. The banks profited from that guarantee in a big way. This is the nub of why the whole situation stinks, not just ATM fees thats a side issue, so if the worst case scenario had occurred, we would have paid out the banks losses. But if the best case scenario occurred, and it did, the bank keeps its profits. I understand they pay tax, but the government should have extracted a cost for the guarantee, some low interest loans for infrastructure, an undertaking to pass on interest rate falls, but no, we got nothing.
Even though we didn't pay out, the banks profited. It was the same priciple as what happened in the US, the banks failed due to ineptitude, the Government covered it. In the halcyon days of big profits, the banks kept 'em. In other words, nationalising losses but privatising profits. Having it both ways.
