Home > ALP, Banking and Finance > Australia’s Big Banks Have Had A Great Financial Crisis Courtesy of Lindsay Tanner, Rudd’s Socialist Minister For Deregulation

Australia’s Big Banks Have Had A Great Financial Crisis Courtesy of Lindsay Tanner, Rudd’s Socialist Minister For Deregulation

It should come as no surprise to learn that Australia’s big, hugely profitable, banks have had a very good financial crisis. Hell, even the head of the Treasury, Ken Henry, tells us so according to a report in today’s edition of The Age

TREASURY head Ken Henry says it has been a good crisis for Australia’s big banks as they fattened margins and dramatically increased their market share.

Dr Henry told a Canberra conference the major banks’ net interest margins widened 0.20 to 0.25 points during the crisis, partly reversing a decade in which they had been halved.

”Net interest margins represent the difference between the rate of interest banks and others charge and the rate of interest they pay on their deposits and other types of funding,” he said. ”Where competition is increasing, it can be expected net interest margins will fall.”

This comes just days after the Reserve Bank all but accused the Banks of gouging customers over the course of the crisis.

THE Reserve Bank has suggested the major banks may be profiteering from their recent round of interest rate increases, arguing moves on lending rates over the past two years have been outpacing funding costs.

The RBA’s comments are likely to reignite political and consumer criticism of the banks, given they appear to debunk warnings by executives that high funding costs continue to pressure mortgage rates.

They come amid signs that households are starting to feel the squeeze on mortgages follow a string of rate rises since October

We should recall that throughout this period the Banks were operating under unprecendeted levels of public support.

So, let us get this straight shall we?

The banks have had a great crisis. They have been goughing the public, but throughout they have been supported by the public through the aegis of the Federal Government.

Notice that we have here the Vile Maxim precisely. Notice that this exposes Rudd’s empty rhetoric on his supposed opposition to neoliberalism.

Things are actually worse than this. Consider the following report on the newly found aggressive debt collection tactics of the banks

Financial counsellors say they are struggling with a big increase in requests for help from debt-laden consumers, who face financial ruin as interest rates rise and financiers become more aggressive about recovering their funds.

Katherine Lane, the principal solicitor at the Consumer Credit Legal Centre in NSW, said the CCLC expected to field about 16,000 calls for assistance this year compared with 13,000 about two years ago.

Yet financiers and debt recovery firms appeared more zealous than ever to bankrupt consumers over relatively small debts, she said.

”We are now facing a wall of calls and there are simply not enough people, not enough phone lines, to help.”
A leading insolvency lawyer who advises the big end of town said he believed big banks and other institutional creditors, confident of economic recovery, have shifted into a new phase in recent months and are starting to enforce their rights to recover bad debts

If you put all this together it is quite clear that Australia’s banks have been practising an especially cynical and vicious form of the Vile Maxim.

How can they do this?

They can do this because Lindsay Tanner, Kevin Rudd’s socialist minister for deregulation, allows them to.

Tanner and Rudd have been especially good mates with the banks. The “Labor” government, supported by the Reserve Bank, looks as if it will try and water down any G20 systemic risk reforms in order to please the gouging banks. If you read Ross Garnaut’s The Great Crash of 2008, you will see that the arguments used to support this do not stand up to scrutiny.

Indeed the “Labor” Government has made bank friendly noises suggesting further tax law breaks and wider deregulation for the financial services industry. These were the recommendations of a report from a government commissioned study that was packed with finance industry figures. It’s like the crisis never happened.

The government in its response, accurately, showed off its record of support for the masters of mankind. The Assistant Treasurer, Chris Bowen, is proud of this record

“That’s the feedback received by the panel – it’s feedback received by the government and we’ve shown by our track record that we’re more than happy to take that feedback on board,” he said.

You bet they are. That’s how what is called the “modern” Labor Party operates.

The recommendations made by the masters makes sense, because for the big money grabbing banks there never really was a crisis given public support.

Lindsay Tanner has justified his treachery by criticising what he calls “producerism.”

But presumably everything described above isn’t “producerism”.

Lindsay Tanner is just about the biggest scum to hit Australian politics in generations.

With an enemy like Tanner the masters of mankind have no need for friends.

If you live in the federal electorate of Melbourne I strongly suggest that you vote the bastard out at the next election.

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Categories: ALP, Banking and Finance
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