It’s time to regulate our big banking cartel

By
John Minto
-
45
7

With all the self-flagellation about free speech these last few weeks most people seem to have missed ASB’s record net profit – $1.18 billion. (Net profit means profit AFTER the ASB has done all its dodgy dealings to limit its tax liabilities here – the real profit is much higher).

Across the big four Australian banks we are now seeing annual profits in excess of $3 billion – meaning close to $1000 per year on average sucked from every person in this country.

The banks and neo-liberal politicians would have us believe we are lucky to have such profitable banks because it reflects a stable, strong economy but this is trying to put a fig leaf on a deeply embarrassing reality.

The simple fact is these four, private, Australian-owned banks are acting as a cartel to maintain massive profits gouged from customers rather than competing to reduce the costs to those who bank with them.

They have an effective monopoly on creating credit to extend to homeowners, farmers and businesses and use a business model designed to swindle as much cash as possible for their greedy, self-entitled shareholders.

Competition between them is a joke. Changing banks is too much of a headache for any sane person to contemplate and the banks know it. Their banking practices are based on it.

It’s a wholesale rip-off. The Sopranos have nothing on these vicious thieves.

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We desperately need much tighter regulation of banking in New Zealand so customers become king rather than indolent shareholders and bloated managers.

Without much better regulation when the next crash comes these same parasites will demand New Zealanders taxpayers bail them out – and both Labour and National will do so because we will be told they are “too big to fail”.

Remember the 2010 bailout of the wealthy shareholders in South Canterbury Finance? – $1.7 billion from the taxpayer pockets to the pockets of the rich.

The same will happen again and again until we have these banks under control.

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45 COMMENTS

  1. Ummm… there is a 100% Government controlled bank in NZ. Did you miss that fact? If these other banks are making super profits then why isn’t Kiwibank hoovering up all the customers by offering cheaper services?

    • Because they’re stupidly constrained to act the same way as other banks and make a profit.

      And all profit is a dead-weight loss to the economy.

    • There are multiple reasons, Gosman. It’s not as easy as going from one petrol station to another. The complexity of switching is a major deterrent from switching.

      I’m currently reviewing my broadband/mobile/power providers and the complexity of what is on offer, by different companies, does not make for an easy time.

      It’s almost as if companies are making it deliberately difficult so as it minimise “churn”. (But surely they wouldn’t do such a thing, right?)

      • Banks actually make it as easy as possible to switch banks because it is in their interest to try and win new business. They have teams of people who help people set up.

        • Banks, maybe.

          Try telcos.

          I was on Vodafone’s automated voice system tring to spealk to someone. Anyone. Human. AI. Alien. Anyone.

          So I phoned:

          Press 1 for that: pressed.

          More options.

          Press 3 for this: pressed.

          More options.

          Press 2 for this: pressed.

          More options.

          Press 5 for that: pressed.

          More options.

          Then I got put back to the beginning. So tried again.

          Press 1 for that: pressed.

          More options.

          Press 3 for this: pressed.

          More options.

          Press 2 for this: pressed.

          More options.

          Press 5 for that: pressed.

          More options.

          And… got put back to the beginning. I gave up.

          The Age of Machines is upon us. Not the Terminators out to exterminate us. But endless Voice Options which will kill us through boredom and frustration.

          Remember the old days, Gosman, when Telecom/Spark/Whatever was part of the NZPO; you phoned up; and a real live person answered? Oh dear lordy, now that was service.

          By the way, Gosman, if you want to reply to this post… Press 1.

        • yes the bank your switching to makes it easy but not the bank your switching from. I just changed banks I left westpac ( who are greedy and always trying to sell you something) and went to cooperative at least its nz owned.

  2. The Dodd-Frank act in the US is supposed to make it unnecessary for govt bailout in the event of a repeat of the GFC 2008. The banks would seize deposits instead. There is an insurance fund to call on in the US to ease the situation for depositors that does not exist in NZ. So but buy bank savings next time.
    But if the banks were allowed to collapse next time (deposits would disappear anyway) it would be the opportunity to clean up the whole mess. They could sit their doors, swallow our savings, and disappear for good. Then the reserve bank could re-hire the staff and nationalise them all, restoring the deposits with QE or fiat money from the reserve bank. But this fiat money should all be given individual identities like paper money notes have. Even if for the sake of the numbers needed they were numbered in groups of a thousand. They should be electronically identifiable as they move through the economy and not extinguished as they are now as a bank loan is repaid. That would kill the “money
    multiplier” (see Wikipedia), and from then on we could have a sovereign currency under the control of the state to serve the public.
    D J S

    • Ha. It’s no surprise that I find the GOSMAN fly to be the first to land on the stinking pile of bankster shit pooping out logical fallacies.

    • I am inclined to think that monies placed on demand deposit should be deemed the property of the depositor (banks at present regard these monies as their own property but offset by a debt to the depositor) and therefore not subject to lending. This would prevent the banks creating money by lending these deposits to others. The government could then create money by fiat and spend it into the economy. This governmet created money would then circulate as real money rather than “debt” money. The money supply could be controlled through taxation.

  4. Fantastic Post @ John Minto.
    I mean, really. A fantastic post.
    Not only are the scum banksters cleaning up here in direct dollar terms per head of population but they influence policy which affects our very daily lives. I’d like to see the fuckers kicked out of NZ/AO, never mind the regulations. They’d just re purchase our politicians, use the MSM to head-fuck us then employ lawyers to skirt around the regulations anyway. @ DJS above saying the banks can swallow savings if they start to fail?? WTF? Unbelievable.
    I read that the CEO of ANZ makes $2000.00 an hour. AN HOUR! ONE FUCKING HOUR! To rest his flaccid buttocks on a chair in an air conditioned office in a small city on a land with a population of 4.7 million people. Many of whom must live in the gutters outside his swanky office doorway.
    I love the irony of it when I walked past the BNZ’s Hereford St branch in Christchurch the other day. It’s a nasty black colour, the drive way the high rollers in their BMW’s use cuts across the footpath and that’s where the inner city’s homeless live. Right there. At the foot of their abusers as they drive past in swanky cars. It’s just too much really.

    • Rock on Country you are right as usual, i think we should attack Australian owned business in general, that is what you should get for putting kiwis in a concentration camp and deporting your problems back to NZ, plate glass is expensive and enough broken windows will cost them their company directors $2000.00 an hour, banksters is definitively the right term to apply here.
      FASCISTS and Con artists need action to be taken against them as well as foreign racists

    • above saying the banks can swallow savings if they start to fail?? WTF? Unbelievable.

      When you loan someone money you’re taking the risk that you’re not going to get it back.

      That risk is what the interest is supposed to cover and, yes, you have actually loaned your money to the bank.

      Now, why do you think that having money should entitle you to having more money?

  5. I’m afraid you are absolutely right, John.

    Only when the NZ government takes control of the money system will anything change for the better. And the government is too weak and too cowardly to tackle the banks. So it’s business-as-usual until it all falls over.

  7. Quoting Why we cannot afford the rich:

    But the problem is not just negligent or reckless individuals, or cocaine-fuelled traders, ever seeking to rout competitors and clients, but the ‘criminogenic environment’ of the financial system.

    Yes, there is a problem with the very ‘culture’ of the financial system. It comes from the financial pressures and opportunities that make such behaviour probable. Deregulated, neoliberal finance actively encourages malpractice. In volatile, fiercely competitive financial markets, with constant pressure for short-term gains that deliver shareholder value, ruthlessness, including aggressive tax avoidance and/or evasion, is essential for success, at both corporate and individual level.

    Hormonal traders The financial sector is and has always been male dominated, macho and mean, but it is becoming more so. Since the crisis, a new drug of choice, after cocaine, has emerged among financial executives and traders wanting to be alpha males: testosterone. Several clinics that used to offer it as treatment for impotence are now providing it to traders wanting to stay aggressive, confident and decisive throughout their 12-hour working days.102 This of course makes them even more likely to take extreme risks and act irresponsibly and unethically.

    In the upper reaches of the financial sector, and particularly in investment banking, the system attracts the ethically challenged and moulds individuals to be still more selfish and myopic. The wider social costs of their private actions simply don’t come into the equation. This is why media handwringing about ethics rather than the system itself must have many members of the financial sector privately rolling their eyes – or smirking.

    Regulate?

    Get rid of it by having a state bank that provides loans with 0%. Make the rent seeking of the banking/financial sector impossible and all without even banning it.

    • Now, just think – if I’d had access to that in the edit time frame instead of it disappearing into the ether I could have edited it to be readable.

      It’s this crappy interface that really puts me off commenting here.

      • It’s hard to be an investment banker. Just ask the Dutch ex-banker who blew the whistle on all the rituals these money greedy individuals have to endure. Take a short cut and just ask our own knighted wanker (I’ll not bother to type that again).

  8. You make me think of going to Kiwibank from ASB. My consumer choices follow a long way after my politics, as you rightly describe.

    Didn’t understand for a second your response DJS. Thus not en-capabled to comment. Social Credit spent 60 years not being comprehensible but I remain open.

    • If you look up wikipedia’s description of the “money multiplier” it might help. At least a year ago it had a good explanation . Social Credit would have loved to be able to refer people to it. Of corse they grew out of the last time the iniquity of private ownership of societies’ means of exchange resulted in a similar situation as many foresee again now. Nobody cares about the money system when it is working OK but it gets attention when it goes out of control.
      The ref above to Global Research ” Don’t walk , run ” is a bit long but worth it if you’r interested.
      Cheers D J S

  9. What did you make of this big hullabaloo about free speech, John? No, don’t come down on any side! It reminds me of the whole story of the Christian religion — what do you do when ‘love’ doesn’t work out. What do you do when return to social democracy doesn’t work out.

  11. Maybe its time to only allow the RBNZ to print ‘money’ & the others to not be able to magic up a mortgage in a jiff on paper.

  12. a quote form RT commentator on FB
    Libby Arndt
    1 week ago
    Neoliberalism is global capitalism and greed on steroids and obsessive focus on the (especially identity politics). It is not the left. The Republican Party of Trump has abandoned the morals and codes of behavior the traditional right represented, including the obligation to seek the public good. The old right and left sought to protect the intrinsic self-worth and value of human beings, if in different ways. Both parties have thrown all this overboard for naked profit and power, at home and abroad, disguising the nullity of our politics with increased mutuality hostility and omission of truth.

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