Wednesday, 3 November 2010

Banking transparency to prevent profiteering: a job for a voters' putsch? First in line, the People's Tank

Last Friday, I published the post below. After yesterday's double trouble, I am moving it up the blog calendar, in case you missed it, and adding additional comments.

 Last week's post, was initiated by Joe Hockey's wish list on what should be done with Australian banks. I found Joe's position reasonable enough in spite of the Government and other voices getting stuck into him.

Then came yesterday morning's announcement by the Reserve Bank of Australia (Oz's equivalent of the USA's Fed) to put up interest rates ever so slightly.  This was not appreciated by retailers (here and here) or by small business. Then in stepped the Commonwealth Bank of Australia.  The bank, when it was publicly owned before privatization by the Australian Labor Party, used to be referred to by many Australians as "the people's bank".  This morning, in an interview with Red Symons on the ABC's  Radio 774, Stephen Keen, Associate Professor in the Schools of Economics and Finance at the University of Western Sydney,  referred to the CBA, rather wittily I thought, as "the people's tank".  Considering the unilateral barging in and jacking up of interest rates by the CBA, a rather apt title.

The CBA's action has caused somewhat of an uproar, it should be said. Nothing has been heard from the ANZ CEO who lashed out at Joe Hockey last week.  The Treasurer says he will be adopting some of Joe's suggestions.  So much for 'economic Hansonism'.

Miss Eagle reckons that Joe has got braggin' rights on this one - 


I have on occasions reminded people of (or sounded off about) usury.  Please see here, here. I have published another contributor's thoughts here. Usury is a very old profession. Perhaps the world's third oldest? Why else have the Abrahamic religions railed against it? Usury is not about to disappear from our midst but people still suffer from its burden as we now see around the world. The burden is carried in both 'civilised' and 'uncivilised' parts of the world.  In the 21st century, the usurers in the 'civilised' parts of the world carry great power - in spite of shortcomings being there for all to see by way of sub-prime mortgage exposures and the Global Financial Crisis.

Australia is supposedly a democracy - although there have been some cracks and fissures evident in recent times. Freedom of speech can be a thing of value.  Yet one has to query what is happening when Joe Hockey's wish list in regard to banking in Australia is received like this. In addition, we have to keep a watching brief on the reaction of the two major parties: Julia Gillard and her reference to economic Hansonism (fancy elevating Pauline to the role of proponent of an economic program or system!) and the fright taken by Hockey's own party and leader. After all, we have seen the close attention paid to the middle and big miners. Are bankers to get the same treatment?  Clearly, if banking reform and transparency is to be urged, the parties - no matter how much they might bleat about their reformist tendencies - will have to be propelled onward by consumers, by voters.

In short, Networkers, if the bankers are to truly have the cold, clear light of transparency brought upon them it will be up to us to push bankers, political parties, and independents on the subject.

As Networkers will realise, I carry a torch for neither the Liberal Party nor Joe Hockey.  But let's be honest.  Have a read of Joe's wish list.  As an ordinary consumer or small business person (the bottom part of the economic food chain, don't you think?), do you see anything improper or unintelligent about what Joe is actually asking?  Should we go looking for Reds under the beds based on Joe's wish list?  I think not.

I remember years ago attending a function in Queensland in the company of a then member of Queensland's Legislative Assembly who had come from a financial background.  We ran into a local ANZ bank manager.  Now this was a time when, under Keating, interest rates were going up and up yet Keating put a lid on certain housing loan interest rates: a case of 22% versus 13%.  Keating, behind the scenes, apparently was trying to bring the banks into line and, so the bank manager reported, he issued a threat.  The banks would behave themselves or Keating would blow the whistle on them.  Apparently, many a bank manager was encouraging business to put a bed in their commercial premises and the bank would conveniently deem the loan to be housing and not commercial!

It seems to some of us that banks are not the greatest contributors to the science or philosophy of ethics.

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