8th Aug 2016
Retirement income: more accountability needed
Author: Kaye Fallick
concerned older couple looking at their bank statement

Late last week, the Prime Minister announced a requirement for the banks to report annually (not monthly as was mistakenly reported in our enews introduction) to the Parliamentary Economics Committee, instead of a Royal Commission, as it is a “regular and permanent method of accountability and transparency”.

However, Opposition spokesperson Dr Jim Chalmers says it is simply “inviting them down for a spot of afternoon tea”, not holding them accountable in a conservative-dominated committee. He maintains that a Royal Commission is more substantial and focused on systemic issues of importance.

Treasurer Scott Morrison weighed into the debate at the weekend, telling Sky News the call for a Royal Commission was a ‘populist whinge’ that had caused ‘alarm’ overseas.

So, who is right?

Perhaps a hint lies in the banking sector’s refusal to pass on the Reserve Bank interest rate cuts announced last Tuesday.

The Age covered the details of banking sector profits in an illuminating article by Peter Martin, who stated “…with the election out of the way and the Coalition returned (with financial support from the banks that will be revealed shortly) they are once again acting as they would have were their behaviour not about to be dissected by a Royal Commission: they are hanging onto a good deal of the largesse the Reserve Bank handed them on Tuesday and using it to shore up their profits instead of helping their customers.”

It’s also instructive to bear in mind, as Mr Martin so conscientiously reminds us, that the top tier banks benefit from government guarantees that were put in place in the wake of the 2008 Global Financial Crisis. So in essence, banks are seen as reliable, and should they need to be bailed out, it’s their tax-paying customers who will do it. So you would think the customer should be king in the relationship?

Adding weight to the argument for a Royal Commission is ex-Reserve Bank board member John Edwards, who told ABC Radio National on Friday that the annual Parliamentary Economics Committee appearances are “not the solution in the long term”. Mr Edwards also commented that the cash rate cuts “should have been passed on, as Australian banks enjoy the best return on equity in the world and their profits are at a record high”. He was dubious about the banks’ need to cover high borrowing costs as he felt such costs were not consistent with the information available to the Reserve Bank. He also noted that a ‘social compact’ between the banks, government and Australian citizens had been broken as – given our high rate of home ownership – central bank interest rate cuts have been an effective monetary policy tool. When banks choose not to pass them on, this strategy is unable to work for the good of all.

Opinion: Action needed to save retirement

Oh lord, where would you start? Within a week of Four Corner’s revelations about the mistreatment of children in a detention centre we have a Royal Commission. As we should. But years of white collar crime by banks is apparently a ‘populist whinge’. 

Of course it is right and proper to set up a thorough investigation into the abuse of children in detention in the Northern Territory. But the haste with which that Royal Commission was instituted – and the lack of judgement in choosing who would lead it and the terms of reference – is simply woeful. Contrast this unseemly and politically naïve rush to the courts with the conservative parties’ response to years of white collar crime by our big four banks.

It really does make us ask what magnitude of financial disaster will it take before the Coalition gets serious about the failure of our major banks to play by the rules, and to serve their customers with any degree of respect or propriety.

As Dr Chalmers notes, there has been a systemic failure by our major banks to observe this country’s financial regulations and to actually put the customer first. We have seen this in deceitful financial planning (including the forging of customer signatures), failure to payout on insurance policies, the rigging of Bank Bill Swap Rates, and a breakdown in monetary policy when interest rates are not passed on, to the detriment of customers with mortgages, and the benefit of the banks’ bottomlines.

Appearing before a parliamentary committee is like being smacked in the face with a damp flannel – uncomfortable at the time, but with little lasting damage. Facing a Royal Commission is another matter altogether – real questions are asked and accurate answers are required. Claiming that ASIC has the powers of a Royal Commission is a joke, as ASIC must also be investigated for its continuing failure to bring the banks to account. As a financial regulator, its track record is woeful. And to wring its hands over the banking ‘culture’ and claim that it is merely ‘culture’ that needs to be addressed is totally missing the big picture of financial fraud. As anyone who follows Fairfax reporter Adele Ferguson’s work knows, it is clear that the big banks need to be tried in a court of law for what they have done to their customers.

As Peter Martin noted on Friday, it’s ‘business as usual’ for the big banks until the Government acts. Treasurer Sco-Mo’s attitude that the call for a Royal Commission is just a ‘whinge’ gives us little hope that his government is prepared to face the facts about our major banks and the way they are systematically screwing the retirement income prospects of millions of Australians. Harsh words? Yes – but someone needs to say it.

What do you think?
Is Mr Turnbull’s plan for banks to report to Parliament annually a good way of regulating their behaviour? Does it go far enough? Or is a Royal Commission the only solution to the ongoing problems in the financial services sector? 

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    COMMENTS

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    Nan Norma
    8th Aug 2016
    10:09am
    I have been told of one bank that sold property without the owners knowledge.
    MICK
    8th Aug 2016
    10:15am
    I do not have a great deal of time for Alan Jones but he hates banks for what they have done to the farming community. Selling up farmers who owe even a small amount of debt and selling for well under the value of farms was their normal predatory behaviour....all condoned by both sides of politics.
    Old Man
    8th Aug 2016
    10:34am
    Banks are subject to regulations and in the case of selling up a property to recover a debt there are a couple of things that should be made known. Firstly, if an asset that is used as security for a loan drops substantially in value and leaves part of a loan unsecured then the choice is to repay the part of the loan that is unsecured or sell the asset and repay the loan in full. Farming land value has always been volatile and the market price is based on returns.

    Secondly, if a mortgagee in possession sale is forced, the mortgagee has a duty, under law, to sell the property in a fair and open manner. This means that all advertising, valuations and notifications are carried out in a commercial manner. If it can be proved that a mortgagee in possession has flouted the law then there will be repercussions.

    It is always sad when a property needs to be sold to clear a debt but mortgagees try to get around this method mainly because of the adverse publicity. A mortgagee cannot divulge any details of why they arrived at a decision because of privacy laws and, quite often, if the truth was to emerge it would paint a different picture entirely. I have been a part of a mortgagee in possession sale and the media had a different story to the total truth.
    Old Geezer
    8th Aug 2016
    12:39pm
    I can't see a problem with that if the banks had followed all their procedures to notify the person owing the property.
    TREBOR
    8th Aug 2016
    6:33pm
    First they got a fair warning, then a fair addition of endless costs, then a fair hanging...
    Jurassicgeek
    8th Aug 2016
    10:12am
    The only thing that would make banks more accountable is to start jailing the bankers...follow Iceland's lead....
    MICK
    8th Aug 2016
    10:13am
    Not one of the top bankers in the US were jailed for creating the GFC. Pretty obvious who they are paying to look the other way.
    Patriot
    8th Aug 2016
    10:41am
    Jurassicgeek
    Also look at the recovery & Stability of the current economy of Iceland!
    Looks like "Jailing the Banksters" was an extremely positive move for the Icelanders!
    Additionally, All loans were "Paid Out" so nobody in Iceland has a housing loan any more.
    Does this mean that - it this can be achieved in Iceland - this also could be achieved in AussieLand?
    If the response to this last sentence is positive I am forced to ask: "Are our Polticians & Banksters lying to us?????"
    And, if so, should we - the people - do something about this then???
    HarrysOpinion
    8th Aug 2016
    11:25am
    How many Australian dishonest financial planners are sitting in jail ?
    Old Geezer
    8th Aug 2016
    12:51pm
    How many people have been jailed for arranging their affairs to get the old age pension? Isn't that what most financial planner do for people?

    I was once told I should never ask anyone for advice unless they had done it themselves. How many financial planners are wealthy? Not too many as why would you bother if you were wealthy?

    So you have people educated by those who think they know how the financial system works telling people how to manage their finances?

    So are financial planner dishonest or simply trying to earn a living like anyone else but without doing the hard yards themselves?
    Gra
    8th Aug 2016
    1:25pm
    Patriot you can't be serious about all home loans in Australia being paid out like they supposedly did in Iceland. Iceland isn't much more than a big cooperative, the population at 332,000 is less than that of the ACT and land mass at 103,000 square Km is less than half the size of Victoria.
    TREBOR
    8th Aug 2016
    6:36pm
    Not the subject here, OG - your move is transparent.

    Now - as for the banks.... and bankers etc who should be sharing a cell with Ivan Milat....

    So the guy who stuffed up and falsified countless investment portfolios at the Commbank, and who went on stress leave for life at $300k a year - is NOT wealthy?
    Old Geezer
    9th Aug 2016
    11:08am
    Trebour that can happen in any business. A friend of mine lost over $300,000 to an employee that cooked the books.
    TREBOR
    9th Aug 2016
    2:22pm
    Yes - we had a couple of beauties as managers for a company I worked with once... ended up in the slammer for embezzlement.

    That company, BTW, promoted useless mouths and attacked all the solid reliable and thinking people... nothing new there. You had to be 'their' kind to get ahead - and that meant if you were a slick-talking con man you were 'in'.

    Amazing.. simply amazing....
    MICK
    8th Aug 2016
    10:12am
    Banks fund the re-election campaigns of coalition governments. Just like the coal industry, which does the same, (big) banks are protected by coalition governments. This government is looking after its buddy and Turnbull knows full that his public finger waving show will have zero effect on behaviour. But it looks good for the masses.
    We need either a Royal Commission into the Financial Services sector or we need legislation which curbs the ability of banks to act in a predatory manner against customers. What we do not need is lies and more deceit from the Turnbull government.
    Old Geezer
    8th Aug 2016
    12:42pm
    Mick it would be extremely hard to find anyone in Australia that hasn't donated to a political party directly or indirectly.
    TREBOR
    9th Aug 2016
    10:46am
    We fund them every election.... first they get donations, then they get cash back on the deal after the voting is counted.

    Good work if you can get it.

    8th Aug 2016
    10:24am
    Banks will only become accountable when they are MADE to be. This will, of course, take government action and will probably mean the slow down or curtailment of banks funding political parties for legislative favours. This is the hard bit, where honesty on the party of politicians will is paramount, and we all know that ain't gonna happen under the smaller parties and independents are overseeing the whole legislative process.
    MICK
    8th Aug 2016
    10:31am
    Correct.
    Old Geezer
    8th Aug 2016
    12:55pm
    Banks are accountable to their shareholders not the government.
    Anonymous
    8th Aug 2016
    2:32pm
    Well - they do get a $250K per account bank guarantee from the government - and they are (hopefully) regulated in terms of levels of lending, borrowing, etc through APRA - so they are not exactly free from government accountability.
    Old Geezer
    8th Aug 2016
    3:06pm
    The government bought that in to stop a run on the banks in times of crisis. They wanted the banks to pay for it and banks did the right thing in that if they had to pay for it then their customers should pay for it with a levy on these deposits. So government did the sensible thing and backed off. Government is now trying to make the banks more robust but this is only going to be passed on to their customers.

    So the more the government tries to tell them how to run their business the more their customers pay so that shareholder return is not effected. That's how it should be too.
    TREBOR
    8th Aug 2016
    6:38pm
    "Banks are accountable to their shareholders not the government. "

    And to the Law, OG, and its intent..... now therein lies a tale.... it's good to see your kind come to an oldies forum so as to further your education...
    Old Geezer
    8th Aug 2016
    8:46pm
    The shoe is on the other foot as I see myself as educating people not the other way round.
    TREBOR
    9th Aug 2016
    10:46am
    Your success rate to date has been exceptional......
    Old Geezer
    9th Aug 2016
    11:08am
    Glad to hear that.
    maxchugg
    9th Aug 2016
    11:56am
    As things currently stand the banks are totally out of the control of government in the management of their businesses.

    Before the sale of the Commonwealth Bank, the government had control because competition was probably a more effective control than legislation.

    The only answer now would be to either re-acquire the Commonwealth Bank, or perhaps open branches of the Reserve Bank to operate in competition with the other banks.
    TREBOR
    9th Aug 2016
    2:23pm
    Interesting thought, Max.

    8th Aug 2016
    10:31am
    Put a Royal Commission through all arms of the financial industry - starting from the top - the regulator - ASIC.

    ASIC might have the powers of a Royal Commission - but are only reactive at best and miss most major financial rorting and risks. If they are not in the pockets of the big banks and other institutions - that will suffice as an explanation until they find another reason why they are so slack as a regulator.

    Turnbull is full of crap when he says his monthly wet lettuce slapping will change the banks modus operandi - he and his party are complicit in ASIC's inaction and financial institution's misbehavior.

    Put an RC through all arms of the finance industry ASAP!
    PlanB
    8th Aug 2016
    10:31am
    Banks are evil and does anyone think they care or will take a dot of notice of Turnbull not on your life -- Turnbull and his mob do not want the banks looked into because they are protecting them -- after all HE is a merchant banker.
    Banks need to be fully investigated.
    Old Geezer
    8th Aug 2016
    12:58pm
    Why are banks evil?
    TREBOR
    9th Aug 2016
    10:48am
    Ah = re-regulate them all and get it over and done with.... except that would screw many a politician's retirement scheme.... well - ya gotta break some eggs to make some omelettes.... better the minority than the the majority have their eggs broken for a change....
    justsay'n
    8th Aug 2016
    10:43am
    Corruption at the highest level is well intact.
    Old Man
    8th Aug 2016
    10:58am
    It's all well and good to scream at the banks' profits but the big question is what can be done to either stop the banks making such huge profits or create a separate tax for the banks. This is much like the offshore companies which run their bookkeeping to suit the tax laws of the country they trade in. It may be morally wrong but it's legally correct and governments will never have the power to tell a company how to structure their business.

    Banks may be morally wrong in the way they pass on interest rate cuts but they are legally entitled to do what ever they want since banks were deregulated in the 1980's. It may be noted that banks borrow funds to lend out and none of these funds are provided by the Reserve Bank which sets the rates. Banks may well argue that they need to borrow at a higher rate and to lend out at a lower rate will cause losses. After all, the only group that banks need to answer to are shareholders, not depositors.

    A higher tax for a particular group, say the banks, may be challenged in the courts as discriminatory. In any event, a change in bookkeeping may also reduce net profits with no effect on shareholders but a huge effect on taxation. A quick check of a bank balance sheet will show such entries under "Contingency". These are funds set aside to cover any eventuality of risk carried by a bank. The risk usually includes bad and doubtful debts which are always a matter of opinion and as banks self insure, property repairs and replacement are also included in "Contingency".

    Banks do pay tax but as with all major corporations all possible deductions are made to reduce the taxable income. It is concerning that some politicians and some sections of the media are insinuating that banks pay no tax which only serves to inflame the issue. It has been said that a Royal Commission will take years and $millions to achieve very little and I tend to agree with this statement. Be mindful that the banks have been in business in Australia for over 200 years and have refined the way they work over that period. We may not like what the banks are doing but I believe that they will always have the answers that any enquiry will put to them. Will this latest flogging with a lettuce leaf idea by Turnbull do any good? Probably not but in my opinion it will do as much as a Royal Commission, 3/4 of 5/8 of bugger all.
    Old Geezer
    8th Aug 2016
    12:37pm
    I have no problem as a bank shareholder with the banks making big profits and paying me good dividends. Many retirees have bank shares so would appreciate that banks are looking after them and not big business by passing on all of the interest rate cuts.
    ex PS
    10th Aug 2016
    1:28pm
    I have no problem with the banks making money, as long as they are not doing so by ripping off their customers.
    The government has no high moral ground here, I have not seen any attempt by them to adjust the Deeming Rate as lower interest rates will mean lower profit margins to low risk investors.
    HarrysOpinion
    8th Aug 2016
    11:31am
    If banks, financial institutions and private commerce throw donation money to a political party and the political party in government compensate the corporate sector with tax deduction then this is CORRUPTION. Perhaps this is the reason the government doesn't want a Royal Commission.
    The pom
    8th Aug 2016
    11:40am
    As an 83 year old retiree who has held shares in all the big banks for a long time I am very happy with the Banks. The income from their dividends fully franked has steadily grown and the asset value is considerably up. Sorry about the people who were ill advised to put large sums of money into fixed interest investments, but I am very comfortably off, although I started with zero assets only about 30 years ago.
    Old Geezer
    8th Aug 2016
    12:34pm
    I agree my bank shares have returned many times what the money would have done deposited in the bank itself. I too had very little 30 years ago as well.
    HarrysOpinion
    8th Aug 2016
    1:36pm
    The pom, you are happy with the dividends and increased value of your shares but....the bank customers are not happy that you are living off their money/ savings and that the banks pay 'crumbs' for savings and give lousy customer service. If you got lousy customer service and your dividends and shares were 'crumbs' you'd drop your shares investment in that bank like a hot potato.
    Old Geezer
    8th Aug 2016
    1:53pm
    HS why do you put your money in the banks then? Why not buy their shares instead and get a decent return on your money instead of the crumbs you now get?

    I don't get lousy service from my banks in fact they go out of their way to help me.

    You must also bear in mind that investing in not short term and there are period when performance is "crumbs" but it is more than made up for with the good times between the crumby ones.
    HarrysOpinion
    8th Aug 2016
    5:25pm
    Since when, can pensioners afford to buy shares? If they could they wouldn't be on a age pension. We seem to be having a discussion here with rich people... Go and get a life !!!
    Aussie
    8th Aug 2016
    5:34pm
    HS.....

    Yes they are all very rich people ....see they have nothing else to do other than kick our arse every time with all this rich issues and suggestions.
    Good for them if they can buy shares ... is ok they will very stress up when the share values drop down ..... sorry but is a fact that you rich people are stress .... we are not we just have a life ..... in Overseas holidays having a pina colada with my reduced pension he he he he
    Old Geezer
    8th Aug 2016
    6:07pm
    Many pensioners I know hold shares simply because they are a far better investment than having money on deposit. Anyone can own shares these days not just rich people. I know school kids who own shares.
    Aussie
    8th Aug 2016
    6:27pm
    Old Geezer...

    yes I know I have 100 shares value of 0.01 cent he he he he
    Yes this days anyone can have shares if you have small money to spare that is true
    Anonymous
    8th Aug 2016
    6:30pm
    great to see the improvement in sausy, four he, he, he, he's and still drinking his penis colanuts, but is still jealous of the so-called rich people who don't want to live on the taxpayers expense
    TREBOR
    8th Aug 2016
    6:42pm
    Why not? They ARE the taxpayers and have been such for fifty plus years... all are self-funding...
    Radish
    8th Aug 2016
    8:14pm
    I bought my bank shares at $9 and hubby at $5.40...anyone could have done the same thing.

    We all have choices..some choose to put their money into interest bearing term deposits others choose to invest in housing etc.

    We took the risk and it paid off for us.
    Old Geezer
    8th Aug 2016
    8:55pm
    CBA has certainly done well since it floated. I bought Westpac for $3 not longer after as I remember being annoyed when they fell to $2.50.

    Banks are now facing some headwinds but if I sold the government would want a big slice of my profits in tax.

    So many people fail to realise that you can't just park your money on deposit which gives a negative return most years after tax and inflation and expect your money to grow. That is one of the most risky investments you can have.
    Aussie
    8th Aug 2016
    9:03pm
    Oh Oh Oh my dear heemskerk99 is back and she is hot hot ....maybe needs to come over so I can share some good times together with my pension that I am getting from others .....Oh Oh Oh dear heemskerk99 you are invited to share a meal a few hot drinks and a great time but I do not think you can handle a nice time just be jealous of what I can do and kick me every time I make some comments I know you love me is Ok I can handle all the stuff you been giving me for a long time now so keep it up baby go on ...... no worries.

    and 4 ...he he he he special 4U babe.....
    Aussie
    8th Aug 2016
    9:08pm
    heemskerk99

    Seriously if you can not contribute to a serious conversation stay out and keep your out because we are having a serious conversation so contribute or shut up.
    By the way the subject is about the Banks not about me so contribute with intelligent comments otherwise you are forcing me to make fun of you and make ridiculous comments like I just did because you mind is very small to be intelligent.
    Rosret
    8th Aug 2016
    11:46am
    When it comes to our cohort a drop in the reserve interest rate is not welcome news so any delay suits me just fine.
    It has got to the point where the Banks are taking a percentage drop from virtually nothing to an asymptotic approach to 0% return on investments. Can they offer a negative interest rate?
    Old Geezer
    8th Aug 2016
    12:35pm
    Yes some banks in other parts of the world are now offering negative interest rates.
    TREBOR
    8th Aug 2016
    6:44pm
    Oh, aye! Used to pay..... PAY customer to take loan and feast mightily on't! Yer tell them yoong 'uns that these day - they'll nought believe yer!
    TREBOR
    8th Aug 2016
    6:55pm
    An' 'alf of 'em'd refuse it!

    Oh, aye! 'Alf would, they would! Oongrateful bustards!
    KSS
    8th Aug 2016
    12:37pm
    Just to point out the obvious:
    1) Banks are businesses i.e. NAB Ltd, Westpac Ltd etc NOT charities or government departments. The Government cannot tell them how to run their businesses;
    2) They are beholden to their shareholders as are all companies listed on the stock exchange
    3) if any of their customers also have super funds then those same customers are also likely to be shareholders and doing nicely as the bank profits rise.
    Old Geezer
    8th Aug 2016
    12:52pm
    Well put.
    HarrysOpinion
    8th Aug 2016
    2:41pm
    So if the government can't tell banks what to do, the government should withdraw company tax cuts, increase their company tax and force them to set up a bank customer's compensation trust fund to be controlled by an independent body ( such as the Supreme Court )for claims of damages due to bank's and or their agent's deception, misinformation, fraud and unconscionable conduct.
    Old Geezer
    8th Aug 2016
    3:22pm
    HS why single out the banks when no other business has to do these things? What a lot of nonsense.
    KSS
    8th Aug 2016
    3:33pm
    And HS there are already laws in place to cover such things as deception, fraud, unconscionable conduct and the like.
    TREBOR
    8th Aug 2016
    6:45pm
    Than you for your suggestion, OG - that is now Trebor Party Policy.... and none shall be spared.
    Radish
    8th Aug 2016
    8:16pm
    Correct in what you say KSS.

    If people want to blame anyone blame Hawke/Keating they deregulated the banks.
    TREBOR
    9th Aug 2016
    10:52am
    Forget blame-gaming - enough is enough of that. Let's just fix the problems by first taking a long hard impartial look at these scumbagging vultures feeding off the carcasse of a once great country and its people and feathering their own nests and those of their mates ...

    (anyone note the subtlety in that post?)
    ex PS
    10th Aug 2016
    1:31pm
    OG, most other businesses do not look after other peoples savings and retirement funds, there is a big difference.
    Old Geezer
    12th Aug 2016
    4:02pm
    Money is just another commodity which only has value while ever people want it.
    Rae
    8th Aug 2016
    1:09pm
    Banks are not forcing debtors to live beyond their means using expensive credit cards or paying absurd amounts for over valued real estate.

    The fine print always states that any loan can be called in usually within 48hours.

    Neither are banks forcing savers to deposit into low interest accounts or deposits. Savers do this as they imagine it is safe and fail to consider inflation although seeing we have deflation that isn't such a problem right now.

    When dealing with corporations it is always wise to remember that they are not human and have no concern for anything but the bottom line.

    What a waste of time and money to force this annual talk fest when a little sensible regulation would achieve something as opposed to just looking like something might happen.
    Old Geezer
    8th Aug 2016
    1:17pm
    I agree lots of hand shaking and putting each other on the back at the tax payers expense will achieve nothing.
    TREBOR
    9th Aug 2016
    10:55am
    "Neither are banks forcing savers to deposit into low interest accounts or deposits."

    Not at all - you just can't do otherwise unless you already have a signficant amount to deposit. No compulsion required to put those on the least into the bracket of the highest proportional cost accounts.....

    See the point? The percentages are that those with the least are the vast majority, so putting them into a position where they have no choice but to run high-fee accounts means the banks can recoup more than doing the same to the fat cats. Simple arithmetic.

    In some circles it's called crass exploitation of the poor, and even 'class warfare'.
    TREBOR
    9th Aug 2016
    10:59am
    What this means is that those with the least, by paying the fees, are supporting the profits of the shareholders.

    Funny how that works out...... someone's gotta cop a bite in the asset at some time over this.... better now than later when the problems are much bigger.

    Bring on the RC.
    Old Geezer
    9th Aug 2016
    11:06am
    If you can't accept the fees then use a bank that doesn't charge them. I do. You can also negotiate a fixed fee for all your banking per year as well.
    Peanuts
    8th Aug 2016
    1:30pm
    I thought this site was about supporting people in or close to retirement?
    As a self funded retiree, I am a bank savings customer and a bank shareholder. Surely passing on the full interest rate change to mortgages will result in a drop in the savings rate by the full amount as well? Should we not be welcoming what the banks have done? And why would we support cutting bank profit and our own super fund incomes?
    TREBOR
    8th Aug 2016
    7:06pm
    Some gotta win - some gotta lose - and as long as some advocate ripping off pensioners, with or without their own home - then there is just a toss-up between the majority and the few fat cats who think it's all beer and skittles.
    Gra
    8th Aug 2016
    1:31pm
    The Royal Commission into Northern Territory Youth Detention Centres is nothing more than a convenient distraction. While people are uttering their dismay at what would seem brutal treatment of young people in the NT (marvellous what you can do with editing of a video) they have taken their eyes off Malcontent Turnbull and the main game (our economy, the shady dealings between China and the Kidman properties, the banks etc.
    Josie4
    8th Aug 2016
    2:10pm
    Remember the Four Corners episode on how Comm Bank and ComServ treated even their own tellers???? I never saw a weaker response from a CEO in all my days. A man on huge money, was most pathetic being interviewed.It was appalling. Heads should have rolled over that but no. (there was a much bigger outcry over greyhounds) There were calls for a RC then but it faded from our screens. It's great to have a strong banking system, but they need to be accountable.
    Old Geezer
    8th Aug 2016
    2:18pm
    I take very little notice of Four Corners myself.
    Josie4
    9th Aug 2016
    6:43am
    Really! Thank God for the Four Corners program on Northern Territory Detention of youth
    Old Geezer
    9th Aug 2016
    12:17pm
    Interesting how the PM stepped in to take the heat off other issues.
    Aussie
    8th Aug 2016
    2:17pm
    This is important to understand how the banking operates as far as rates concern read about the LIBOR on the link below ..... that may make some clear understanding how the banks can shift their rates and the government is in a dream world because rates are calculated using the LIBOR rules and government has no control.

    http://www.investopedia.com/terms/l/libor.asp
    Aussie
    8th Aug 2016
    2:19pm
    And this give you more info ...

    http://dealbook.nytimes.com/2012/07/10/q-and-a-understanding-libor/?_r=0
    Travellersjoy
    8th Aug 2016
    2:59pm
    I believe it is evidence that Turnbull is a very weak prime minister, at the feet of the corporate sector.

    He is, after all, a merchant banker. People seem to have re-elected this lot without any regard to the national interest, the Common Wealth, or even self interest. Neo liberalism has let predatory capitalism loose on the poorest, the vulnerable, and the foolish. The middle class who think the bank is interested in them rather than their contribution to bankster bonuses, are deluded and dangerous.

    Amazing.
    Old Geezer
    8th Aug 2016
    3:01pm
    Unfortunately they are the best we have as we don't have a viable alternative to run this country.
    Aussie
    8th Aug 2016
    3:05pm
    Mate yes Amazing .... but welcome to the Australian voters they elected them ..... Now we are stuffed specially the future of our kids

    We are to old now to be concerned too much but my kids still young and with not very clear future.
    All we have to do is look at USA younger generation very difficult future for our kids but they do not care about our Kids they are only interested in keeping their jobs and a healthy pension at the end ...... Just a bunch of SEAT WARMERS on our expense.

    Yes mate Amazing .....
    Aussie
    8th Aug 2016
    3:07pm
    Old Geezer ...

    The best we have ????? What about our young politicians brainwashed by the old ones .... come on we have beautiful Intelligent and very powerful young people that can make a big difference

    But you are a Lib so of course ....Ummmm
    Old Geezer
    8th Aug 2016
    3:20pm
    Nope I'm not a Liberal or a Labor. However we would be in deep *** if the Labor mob had got back into power.
    Aussie
    8th Aug 2016
    3:27pm
    Old Geezer ..

    Sorry I so U where a LIB ....
    Yes agreed with you we will be in a bigger S....
    Aussie
    8th Aug 2016
    3:36pm
    Time to change he he he he .... Just got this info from a friend

    https://www.youtube.com/watch?v=W3NUBdlvsXI
    and this
    https://www.youtube.com/watch?v=x1ylQq5sbOM

    10 years rental return + 20 years visa renewable for another 20 ...and property title on your name and your kids or family as join .......

    He he he he .... Time shift out our money and ensure Banks do not take a big cut .......
    Just joking but maybe a good idea ???? not sure I do not have the money
    Boof
    8th Aug 2016
    3:44pm
    1985 I had a Housing Loan from one of the big 4 banks..Which bank? Oh. I can't tell you. $150,000, over 20 years. Went to the Maritime Service Board, CREDIT UNION. They paid out the bank gave me a new loan. saved me $80,000 over the 20 year loan. Why would you go to a bank??? Over a CREDIT UNION.
    Old Geezer
    8th Aug 2016
    3:48pm
    After my problems with a credit union I would definitely stay right away from them.

    8th Aug 2016
    4:30pm
    To have a bank report to the government rather than an independently chaired committee overseen by members of ALL political factions would be tantamount to having males who were sexually abused by male heads of the church reporting to a Cardinal - transgressions, breaking of the rules, violations of trust, legal infringements, etc would NEVER be acted upon with a view righting wrong!!
    Old Geezer
    8th Aug 2016
    4:56pm
    Why should the banks report to the government as no other companies in Australia does? They already have reporting responsibilities the same as any other listed company. What will this achieve?
    Anonymous
    8th Aug 2016
    5:51pm
    OG, because they are holding more peoples' money than any other company in the country, that's why.
    Old Geezer
    8th Aug 2016
    6:03pm
    But money is just another commodity so I still can see the problem.
    Anonymous
    8th Aug 2016
    6:10pm
    Possibly because they can:

    *Print money at a ratio of 12:1 on a loan to deposit ratio, or more if they could get away with it for starters - no other company can do that risky activity.

    * Would keep lending at reckless LVRs to investors if the prudential regulator did not occasionally step in - which would leave the public purse at risk as usual.

    * Would not provision for bail-in of a bank failure using bank hybrid customers if they were not forced to do so by the regulator - they would try to foist their losses on the public again. Only banks cause this type of risk.

    * Technology risk - no other businesses pose risks like banks if they are compromised and all customer records are compromised or worse.

    The list goes on and on.

    The banks are in a privileged position and pose great risk to the public purse if they are not closely controlled compared to any other businesses.
    TREBOR
    8th Aug 2016
    7:12pm
    Because in this society, OG - people NEED money to live. they don;t 'need' a new microwave every fortnight, but they do need their money safe every fortnight.

    Banks are NOT like some company from whom you buy once or maybe twice.
    Anonymous
    8th Aug 2016
    7:36pm
    OG, you "can't see the problem" either because you are mentally blind or you don't want to see.
    Old Geezer
    8th Aug 2016
    7:47pm
    No I can't see the problem because there just isn't one. People just need someone to blame so why not blame the banks. People need to take responsibility for their own decisions. The banks don't decide that people should invest in them people decide to do that.
    Anonymous
    8th Aug 2016
    9:23pm
    No no no OG - it is just risk management when dealing with the banks - and there are plenty of public risks in banks as they stand.

    Anyone with over $250K in one or more accounts in the same name/account, or has shares or owns bank hybrids are now going to bail-in any bank that goes bust in future using their money - so there are better processes in place to reduce public risk.

    But banks are still not sufficiently funded with investor money to ensure it is investors that go to the wall instead of the Australian public. This (hopefully) full funding wont be in place until around 2019.

    There are plenty of risks and problems with banks - until investors are totally left holding the baby and the bath water.
    Anonymous
    9th Aug 2016
    8:07am
    OG, there are none so blind as those who REFUSE to see - like you.
    Old Geezer
    9th Aug 2016
    11:03am
    Yes I do see that putting your money on deposit with the banks is more risky than actually owning their shares.

    If you put your money in a bank then you have a risk that you will lose that money which is a better risk than putting it under your mattress. There is nothing wrong with that.

    How many banks do you use? If you have all your money in one bank you are taking a big risk.
    TREBOR
    9th Aug 2016
    11:13am
    I take it then that the banks will not require a public purse bail-out when next they fail? Good-O....

    The moment that happens, they will suddenly become a life's blood service to the people and will have to be saved at any cost.... so tell me again how they are no different from any other company.... and how money is just a commodity...

    Funny thing is Stalin considered people a commodity..... seems some are not too far from that position here, today.......
    Anonymous
    9th Aug 2016
    11:59am
    There seems to be some confusion in how debt is subordinated and ranked should a bank go bust in Australia.

    Below shows bank debt ranked from low risk at the top - to the highest risk at the bottom.

    The further down the list you are - the less likely you are to get your money back if a bank went broke.

    1. Savings Account
    2. Term deposit
    3. Tier 2 Bank Hybrid
    4. Tier 1 Bank Hybrid
    5. Ordinary share

    Shares are the most risky investment if a bank goes bust.
    Old Geezer
    9th Aug 2016
    12:06pm
    a bank goes bust even saving accounts would be at risk. That's what happened in the GFC. No amount of capital would protect saving accounts if we get another financial crisis.
    Anonymous
    9th Aug 2016
    12:23pm
    Yes, savings MIGHT be at risk - but banks, credit unions, etc have assets regardless and will never have nothing - due to their required government regulation.

    I experienced the unwind of MF Global after the GFC and recently got the final payment from them about 6 years later. The receiver eventually got all of my money back - but the unwind can take considerable time. I was at the top of the debt pile.

    If you are at the top of the debt pile your chances are considerably better than being at the bottom when the distribution of available assets is undertaken.

    If you are at the top you will get something back - and if you adhere to the government guarantee limit of $250K, your chances are further enhanced.
    Radish
    10th Aug 2016
    8:38pm
    Aussie banks are best in the world and I doubt will go broke.
    Old Geezer
    12th Aug 2016
    3:59pm
    Put it this way if Aussie banks go broke then it will be end of the financial world as we know it.
    TREBOR
    8th Aug 2016
    6:32pm
    a. No.

    b. Asset thresholds should be indexed.
    Boof
    8th Aug 2016
    8:14pm
    What was Ur problem with a C.U. Old Geezer? U may have been with a small insignificant C.U.. With an incompetent Board of Directors. Banks have them too, BTW. U may have been the problem. U didn't ckarify Ur statement?
    Old Geezer
    8th Aug 2016
    8:42pm
    Credit unions are fine until something goes wrong is all I am willing to say.
    Anonymous
    8th Aug 2016
    10:44pm
    Most things are fine until something goes wrong. If you keep your fingers on the pulse a lot can be avoided IF you know how and when.
    Old Geezer
    9th Aug 2016
    10:57am
    Even keeping my fingers on the pulse would not have helped what happened to me. In fact it was just that that alerted me to the problem.
    The pom
    9th Aug 2016
    9:25am
    Someone queried how a pensioner can afford to buy shares. Well I am an aged pensioner and I don't drink smoke or gamble. I don't eat out very often as I find I can cook a better meal at much lower cost than most catering establishments. I keep full accounts of all expenditure and maintain a budget on my old computer. I drive a modest car which I bought new just over 3 years ago, and find I have money from time to time to invest in more shares. I do let Centrelink know my financial state regularly. At 83 I am fit, comfortably off and happy with life.
    Old Geezer
    9th Aug 2016
    11:15am
    The only difference between owning houses and shares is that shares can be valued by the second whereas houses are only valued twice once when you buy and then when you sell. So if you only look at the share prices twice while you own you will have some investment as a house.

    If you think houses are less risky than shares think again.
    Old Geezer
    9th Aug 2016
    4:21pm
    Looks like interest rates are going to fall further with a cash rate of 1% in 2017.

    http://www.abc.net.au/news/2016-08-09/nab-rate-cuts-business-confidence/7704546?section=business
    Aussie
    9th Aug 2016
    4:45pm
    Old Geezer
    Good info thanks a lot
    Scrivener
    10th Aug 2016
    4:06pm
    Banks are dirty, nasty, evil creatures-s-s-s Precious-s-s-s-s.
    Old Geezer
    12th Aug 2016
    3:58pm
    Well what can I say keep away from them then. You don't have to use them.


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