Increased criticism for banks
During October the level of criticism levelled at the big four banks has increased noticeably. The negative commentary has been fuelled by their super profits, extreme CEO salaries and speculation the banks would increase interest rates without the government raising the official levels. The NAB and ANZ banks annual profits of $5 billion and $4 billion respectively drew a lot of attention and at the same time the CEO of the Commonwealth Bank was forced to publicly defend his $16 million dollar salary.
'Now is the time to have a mature debate about whether we want Australian banks to be about super profits or whether they have a community obligation,' stated the shadow treasurer, Joe Hockey. He continued 'The Government's 30 statements from Wayne Swan warning the banks and expressing concern about moving outside the Reserve Bank cash rate movement has been totally ignored by the banks.' These are strong comments for the treasurer of the Australian liberals, a party who promotes the virtues of the free market.
Michael Pascoe, respected finance commentator of more than 30 years, weighed into the discussion with the following: 'It's a sad fact that the mutuals (Credit Unions and Building Societies) don't get the consideration they deserve, at least in the housing space, but it wouldn't take much to change it. If every time Wayne Swan and Joe Hockey launched a bank bash, they included a plug for the mutuals as excellent alternatives, the punters might go in search of them. And the Treasurer and shadow treasurer might both improve their credibility by the association.'
Pascoe continued with his endorsement by stating that ‘The mutuals are not hard to find – branches all over the place. They just don't spend much money advertising the fact.’
Let’s hope the debate over interest rates and the role financial institutions play in our society continues. We welcome any honest discussion over these issues and are happy for any comparison of our customer service, products and rates with those of the profit driven banks.
