The banks have become the robber barons

Crikey readers have their say.

Benjamin Law: Margaret Andrews writes (3.22pm Friday 5th Nov): Re. "Benjamin Law: up close and personal with Margaret Andrews" (Friday, item 1). Earlier today, I received an email from Crikey informing me that they intended to publish an article by Benjamin Law. The article had not been sent to me, and the deadline for comment had passed by the time I saw the email. I have now seen the published article. I did speak to Mr Law after his address. I simply shared with him a different point of view. We had a civil conversation for a couple of minutes. I told him that I was speaking personally -- not as the representative of anybody else. For Mr Law to beat up a private conversation with a person who has a different point of view, says more about his attitudes than mine. It is somewhat ironic that, as a speaker at a conference on "diversity", Mr Law now engages in personal ridicule. The article is nothing but a transparent excuse for Mr Law to attack my husband, whom he admits he dislikes, without even speaking to him. David Wootton writes: Re. "Benjamin Law: up close and personal with Margaret Andrews" (Friday, item 1). Please Benjamin Law, run for public office. Any public office. You'd have my vote. Interest rate gouging: Roy Gotaas writes: Re. "Westpac's Labor insiders go to work in Canberra" (Friday, item 2). There seems to be an area of bank behaviour which no-one’s game to mention: interest rates on credit cards! This affects millions of Australians ... at least as many as have mortgages. Most people seem focussed on mortgage rates, but credit card debt is a huge factor in many people's lives and many businesses. And they’re a huge slice of the bank's profits! It used to be the case that these rates fell whenever the Reserve Bank rate fell but, during the last two or three years, this largely stopped happening. Banks are offering investors (i.e. they’re borrowing investors money) a 6% to 7% return. What are they charging borrowers? Here are some examples:
  • CBA: Purchases: 19.24%. Cash advances:21.49%
  • Westpac: Purchases: 19.34%. Cash advances: 21.24%
  • NAB: Purchases: 19.49%
  • Citibank: Purchases: 20.74%. Cash advances: 21.24%
So, they’re borrowing at, let’s say, 7% and re-lending at up to 21.24%! That’s a margin of 14.24%! For doing what? Running a computer system! And, don’t forget, on top of this 14% profit margin, there are all the "extra" charges and fees! The traditional role of banks used to be as a safe haven for people's money. For this, a 4% margin was considered a suitable reward. But that was before the banks started building skyscraper head-offices and paying their executives millions in salaries. Now the banks have become the robber barons. The Treasurer can’t get away with the usual waffle about "shopping around" for better rates: the evidence shows there aren’t any significantly better rates!  And don’t let the banks get away with claiming they need this obscenely high margin to cover defaults: there wouldn’t be so many defaults if the rates weren’t so greedy! Hillary Clinton: Keith Thomas writes: When the Chinese offered to help Australia in crowd control during the Olympic torch relay, we quite rightly told them firmly we could handle security matters on Australian soil. There was at the time a credible threat of many minor disruptions to the relay and we handled them well, consistent with Australian traditions of tolerance of peaceful protest. When the US Secretary of State arrives, when there is no credible threat of protests any more severe than those during the torch relay, we permit the Americans to frame the arrangements, closing down a large part of one of our major airports, and giving US security personnel free rein to participate on the ground. Just because ugly Americans like to throw their weight around abroad is no reason for us to tug our forelock and welcome them to walk all over us.

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5 thoughts on “The banks have become the robber barons

  1. whatiris

    Margaret: “I’m not the poopy head, it’s him who is the poopy head.”

    Also, I really like the “diversity” scare-quotes thing. Keep digging!

  2. shepherdmarilyn

    Well, don’t have credit cards. Why is it that people whining about the banks and their credit charges don’t get that they don’t have to have the bloody things?

    Is there no-one capable of free choice or free will as they whinge and whine and carp about everything.

  3. Norman Hanscombe

    Don’t wish to alarm you un-necessarily, marilyn, but I have to say I agree with you on this issue, even if your criticism did seem a tad harsh. I’m sorry, and hope it doesn’t spoil your afternoon.

  4. whatiris

    Indeed. Also, it’s complete crap that there aren’t cards with lower rates. There are credit cards with significantly lower rates if you’re willing to forego the frequent fliers nonsense.

  5. zut alors

    @ Keith Thomas

    I agree 100%. When Rudd jets into Washington DC they don’t close down part of the airport and permit Australian security staff to steamroll through the city. The Yanks seem to believe the following:

    1. their heads of state are important beyond comparison with any other nation’s
    2. their heads of state are in constant danger because the USA is universally unpopular

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