Quasi Royal Comission

So, Turnbull has shown what I think is feigned outrage at banks not passing on the rate cut yesterday, but today they have come out with a parliamentary inquiry that banks will need to front once a year.

I think they will ignore this, and it has either been organised in advance, or, is another not weel thought out reactionary plan that will fizzle.

What are your thoughts ?

 

While I prefer Liberal to Labor (in principle) I think Malcolm is out of his depth - or something. This, to me, seems like he just wants to be seen to be doing something. It's not going to make an iota of change.

Makes me laugh, people in the paper and online complaining that the banks didn't pass on the full interest rate cut. If there wasn't a cut would they be complaining? Take the $22/week saving (you know, $300,000 loan over 30 years example) and be glad for it. And buy bank shares.

 

I think it'll raise bank fees as there'll be extra handling involved at every stage to allow for compliance tracking.

Sounds like a good idea to Joe Blow but in practice isn't actually needed as the banking system in Australia is already pretty good.

 

Seems odd the reserve cut rates to get people spending and stop saving and the retail banks only pass on half to borrowers and increase saving interest rates. What's that about?

 

What other levers are there to "stimulate the economy"? Government has been useless for the last umpteen years, because none of them can look past the next opinion poll, let alone trying to plan for the next 10 years. And then they can't afford to cut costs, because some minority interest group will think they're going to miss out and the government can't afford to "lose their support in the community, in fact we'd better set up a fund". So IMHO, interest rates are a dull instrument. And seriously, if business/investors aren't going to borrow at, say, 4%, will 3.75% make a difference?

 

The question of whether the gov should stimulate the economy needs to be raised. If yes, there are a range of direct and indirect options available. 2 examples are a cash handout and a school halls building program. Not saying these were effective. Just giving examples that are not interest rates.

A better example might be the gov investing in needed infrastructure projects

 

But that's the problem, isn't it? A government without the courage (or perhaps foresight/wisdom) to do that investing.

 

school halls are infrastructure. I don't think building more roads is going to help much.

 

True. Which is why I qualified my infrastructure comment with the word "needed". Not all the school halls were needed but schools were not allowed to build what they needed for political reasons.

The government should invest in needed infrastructure projects. In Perth, that would be train lines.

 

That is diversion tactics, that is what that is

 

It's actively undermining the outcome the reserve is trying to a achieve if you ask me.

 

lol that would be one way to answer the critics, however, it is no laughing matter as they may well do just this !

 

We also need a royal commission into workplace toilet paper, single ply violates human rights legislation on at least 3 different counts.

 

Depends on which side of the fence you sit,What about the self funded people who over the past few years with the low fixed term or short term investment rates have been blown out the back door,then you have the stake holders-share unit holders same story,

Maybe the Australian public better look a bit deeper into this as the cash rates go down further,just look at what happens with GDP ,"Japan" is the perfect example,and what happens next..

 

Well, I do not think it matters what side of the fence you sit, basically because things have changed, I also remember when deposits were high & rightly so they should have increased rates of return as RBA raised rates, that is exactly what raising is supposed to do.

Cutting of rates also is meant to encourage spending through new loans and more disposable income for those already with loans, as well as encouraging business etc etc....

But I have said a few times, it is broken for now anyway, as each cut has not done to the dollar nor to business what it should have been doing, so time to think of other ways IMO probably a few years ago.

I agree, this is all marching at full speed into what others have already done.....lemming like.

The other problem is banks have magnified the problem IMO & also, they can change the deposit rate at any time they like, let's face it, people not likely to have money sitting in deposit accounts for some time & frankly I thing it all further fuels the housing problem & while some may say hooray...more money for me, I do feel it is further winding up the spring for pain to be unleashed at a later time.

The banks need pulling into line, I think they need regulation of certain kinds.

Oh, and if you want to think about the nice present for depositors, why have credit cards stayed about the same cost for a long time.

I am not convinced a royal commission would be any better, may actually be worse.

It is all way overdue for a shake up, the question is, will this new announcement do anything ?

 

How do you think hauling your employer over the coals would affect your job security?

 

The rate cuts would be part of a Royal Commission. But the vast bulk of it would focus on the scandals in the finance sector, here is a small list...

• Poor financial advice
• Mis-selling of hybrid securities and other complicated investment products
• Involvement in collapsed managed investment schemes
• Dubious consumer credit insurance practices
• Charging unconscionable bank fees
• Rigging interest rates
• Dubious insurance policies offer by superannuation companies

The feigned outrage of the bankers having to face a Liberal controlled lower house committee is dishonest at best. Most of the time they will basically respond with "commercial in confidence" or "we are required by the corporations act to put our shareholders interests first".

 

Ha ha ha! This made my day...

 

It's a farce. If ASIC has the powers, funding, and willingness to do their job like Malcom Turnbull has claimed, then inviting reps from the banks to parliament is just an expensive time wasting exercise to try and deflect political pressure for an RC.

 

Banks need to show ethics, not denying that. However...
Bill Shorten a no-show at anti-bank rally