MartinLuther

I don't think the banks are entirely responsible of mostly responsible for the GFC. A good deal of the blame lies with many who are not banks.

However the banks are easy if predictable targets for people's ire.

I'd like to see the moaners get on with modern life without the use of a bank. Good luck with that.

sonlymewalter

There's making a profit and ripping the arse out of people. IMO that's what these pillocks have done. Making billions out of people who have no alternative but to put up with it is frankly abhorrent. They're not a charity case i get that, but then neither should they constantly rob the everyday man in the street.

I agree with your sentiments re mortgage rates and people planing ahead and to some extent greed has played a part but most people are honest, mortgage paying, hard working people who are trying to live day by day who's salaries don't raise at the same rate of knots that the banks and other robbing institutions seem fit to charge at

Customers abusing staff is stupid, no excuse and the largest majority are good customers asking the banks to be fair and not indulging in this type of behavior so let's get it in perspective....

as for choice, actually i don't think clients do have much of a choice as the banks pretty much tie people in to contracts with little room for manoeuvre for the everyday client who finds themselves in an ever increasing interest rate situation.

Fair enough, banks are not charities they're a dividend paying institution - but they caused a lot of the financial damage themselves and then plead poor whilst robbing from the blind they aint got my sympathy, especially while they have made more during the time everyone else is left struggling to pick up the pieces.

greedy robbing barstewards and the sooner they are regulated to stop cartel behavior, the better

Robbie37Michelle32

:curse::curse:I have to agree with this post .
Banks just laugh at honest hard working people that have to suffer because of the Banks greed.They don't care because they are driven by greed,and as long as they can walk to the nearest Porsche or Lambo Dealer they don't give two shits to the likes of me and you.

The amount of people they have put out of work and see companys fold is shocking yet they still brag about the massive bonus's they get.

I and all for them getting a bonus but only when they do something right and not send the whole world into melt down.

I do agree that it was not all the banks fault but the weak Goverments who did'nt have the balls to stop them and had to bail them out.Time to regulate all of the Banks and stop them from printing their own Money.:curse::curse::curse:

MartinLuther

I must admit that the worst part of buying a house is when the bank manager puts a gun to your head and says "Take out a fudging mortgage or we take your fugging job. Bitch!"

Put's me right off.

sonlymewalter

the best part about buying a house is taking out a mortgage at a reasonable rate and the bank manager saying "don't worry mate the banks can't lose. We'll fluck up global finance, create worldwide financial crisis, get bailed out by governments cos they can't afford not to, create cartels to screw the arse off you, and make billions of profit even during bad times - whilst at the same time bleating it's the poor house and giving ourselves friggin kahoota bonusses"

And just before you leave the bank the Bank Manager shouts after you "and mate, don't even think about complaining - cos that really would be innapropriate and really bloody stupid

MartinLuther

But look on the bright side. The Aus banks didn't cause the GFC. They didn't get bailed out by the government. The government gave enough backing to stop the smaller banks going broke* thus avoiding more consolidation into the big 4 (who would have survived without government's backing and would have bought up the smaller banks as they went bust). The banks aren't pleading poverty but are highlighting that their raw materials are getting more expensive. The interest rate is now lower than it was immediately before the GFC. And all that government backing kept the Australian economy out of recession.

* obviously the Aus government couldn't stop HBOS going broke which caused the sale of Bankwest to CBA.

And who knows, but the increasing interest rates might curb the enthusiasm of people investing in the Australian housing bubble.

sonlymewalter

You can't seem to make your mind up

There are so many flaws in your argument it would take me to the next GFC to explain, which I can't be arsed

Have a great day

MartinLuther

'Seem' being the operative word. Care to explain? Or did you miss the point that HBOS, who owned Bankwest, is a British bank and outside of the Aus government's sphere of influence?

I'm happy to discuss the alleged flaws in a mature way. But also happy if you "can't be arsed'.

littda01

The banks are in a very 'interesting' position... much of their profit comes from mortgage lending. Most of them have about 50-60% of their loan book in mortgages.

They need the Aussie battler to carry on stepping up to the plate and taking on huge mortgages. And obviously they need to make profits on those by creating a profitable spread between their costs of borrowing and interest rates they lend at.

And the battler needs the banks to keep doing this so that he can buy that house or investment property at the crazily-high price being charged for it. He needs them to offer LTVs of 95%+ and earnings multiples of 5-6x +. Things that are against normal 'conservative' lending practices.

If the bank doesn't keep this whole game going, then its main business is shot and not only that, the value of its loan book is compromised. Similarly for the battler, if the bank doesn't keep the money flowing to the RE market, then prices fall, reducing his financial well-being.

So the battler needs the banks to keep making good money or he is toast.

And BTW just cos the banks are having a good time of it now does not change the fact that a) global funding costs are increasing b) new mortgage growth is at its slowest rate for years.

So they both need each other.

freebo

I'm sure I heard recently that hedge funds are lining up to short the big four Australian banks, and the above illustrates the reason nicely...

iamthecreaturefromuranus

'raw material' costs may have increased, but they seem to have already covered that. Quote from the RBA earlier this year...

"Australian banks’ lending rates have also risen significantly relative to the cash rate. For the major banks, the increases in lending rates have more than fully offset their higher funding costs, with their net interest margins in late 2009 about 20–25 basis points above pre-crisis levels. Since then, margins may have narrowed slightly."

MartinLuther

Oops, wrong tense. I should have said highlighted

That last bit of the quote suggests that they are ripping people less now than previously. I wonder what the chattering classes think of that?

IvanM

Any bank here operates under Australian legislation and regulatory Authorities. HSBC, ING etc do so as well.

littda01

This is a very good article summing up a lot of this.

http://www.theaustralian.com.au/news...-1225948549080

Here's the main quote:

Moreover, while the Australian banks have not been reduced to rubble, as in the US and Europe, they face the same more bracing post-crisis world.

Their balance sheet expansion and profit growth from two decades of higher household gearing is ending as the credit boom gives way to debt deleveraging. And the big miners don't need them to finance their investment boom.

The PwC analysis suggests the public does not fully appreciate this fundamental break nor the lingering global financial risks.

Instead, the legacy of a household sector heavily geared to high housing prices has made interest rate politics even more explosive. Housing interest payments now take twice the share of household disposable income than during Paul Keating's 18 per cent interest rates of the late 1980s.

And now the Reserve Bank is lifting interest rates to quarantine the huge national income boost from our sky high iron ore and coal prices. It's demanding that Australians save more of our terms of trade boom rather than spend it on, say, a day of Melbourne Cup revelry. It's enforcing an income transfer from borrowers to savers as the economy unwinds a decade or more of borrowing.

The winners from higher interest rates are retirees and savers. But no one wants the political heat from mortgage-belt losers, who may be losing further as the banks unwind their cross-subsidy from business lending. Will this heat fall on Swan for not bringing the banks or his budget deficit to heel, or for not taking the IMF's advice to jack up the GST and cut income tax to reward saving? Or will it singe Stevens, who Sydney's The Daily Telegraph famously called Australia's most useless man when he lifted rates during the pre-crisis boom? Or the banks, because they've always been bastards?

MartinLuther

Okay I can't believe I have to explain this but here goes.

I wrote "The government gave enough backing to stop the smaller banks going broke" with the footnote "obviously the Aus government couldn't stop HBOS going broke which caused the sale of Bankwest to CBA".

This was highlighted as me not being able to make up my mind. Which is just complete crap and poor comprehension. HBOS went tits up in the UK and had to be rescued by the UK government. This has completely nothing to do with the Aus government. To be clear the Aus government was not in the position to stop HBOS going tits up. Now Bankwest was a profitable subsidiary of HBOS and if Bankwest had been going broke then the Aus government could have got involved with saving Bankwest. But it didn't because Bankwest was not going broke. It was still a profitable bank and did not need rescuing. As it was a profitable subsidiary it was sold to bring money into HBOS which was a decision completely out of the control of the Aus government. Bankwest was sold to CBA very quickly. Not because it was going broke but because it was in good condition and was being sold quickly as part of a fire sale.

So back to what I said "The government gave enough backing to stop the smaller banks going broke". This is what happened. None of the smaller banks went broke.

I added the footnote about Bankwest because I could see someone a little slow in the thinking department suggesting that Bankwest went broke. So I thought I would cut that one off at the pass by putting in a footnote that Bankwest was sold at that time not because it went broke but because its UK parent went broke. Which was something completely outside of the control of the Aus government as HBOS is a British bank not an Australian bank. And although Bankwest was the Australian subsiduary of HBOS it was covered by the Australian guarantees but as it didn't go broke it didn't need the Aus government to rescue it.

I'm starting to think that comprehension tests in English shouldn't have gone multichoice