Tell that to some of mortgage brokers.eg. Do you see adds for Aussie home loans any more?
No they didn't. The CBA maintained the warehousing facilities to securitised lenders during the GFC - the MBS/CDO market (predominately offshore) collapsed so that the warehoused debt couldn't be shifted to market.
That's a laugh coming from the head cheerleader of the Rudd/Gillard Bashing Club.
You mean Macquarie, that provided the mortgages for Aussie (Macquarie white labelled more than they sold under their own brand)? They were the specific example I was talking about, as someone who was involved. The warehousing didn't stop until the funds couldn't be shifted, absolutely not the fault of CBA.Tell that to some of mortgage brokers.eg. Do you see adds for Aussie home loans any more?
There are industries with far more entrecnched oligopolies and less competition than banking.
Take out WES/WOW and MTS (which is still less than 20% of the market) and that leaves almost no one left in the grocery space.
TLS/Optus and Voda rule the telco market.
Media? Two major players (although the internet has opened up small players in the news space).
TV? Similar to the banking industry.
Bank bashing is just lazy politics; do we really want to weaken our banking system in preperation for a GFC mk2?
Fair comment, I'm sure. I've never been in the position of wanting to borrow for anything other than real estate mortgages.
I guess when you watch too much ACA/Today Tonight the big four banks are all "evil" and out to get "the battlers", aren't they?
Yes they are.
"Commonwealth Bank lifts interest rates by 45 basis points after RBA's 25 point lift"
http://www.theaustralian.com.au/bus...as-25-point-lift/story-e6frg90f-1225946781624
This would not happen if the Commonwealth Bank was still the peoples bank.
Thieving scumbags.
If you want a competitive capitalist environment, you must have competition, the more competition, the better for the consumer (regulation of the market is another story).
Can you explain exactly what you mean by "privatize the losses environment" in the Australian context?It been said before but it's worth repeating - the risk reward for the banks is not real - it's skewed by the too big to fail, privatize the losses environment we currently tolerate.
Indeed there are, and many of the smaller institutions offer considerably better deals if you ask them. I've never found a situation where they have not been prepared to outbid the big four on deposit rates.You make it sound as if average Joe is forced to bank with the Big 4.
I'll do everyone a favour
http://www.apra.gov.au/adi/adilist.cfm
I had a quick look, I'll admit, and my memory is fading as I am getting older, but I am fairly certain there are more than four listed.
Would you prefer a small number of large banks controlling a significant share of the market, or a large number of small banks each controlling very little? The current market structure affords choice to those that are engaged with their finances, whilst offering 4 safe "default choices" for those less engaged or less able. If the system consisted of only banks with smaller balance sheets, this would result in the system’s bank having a weaker credit rating, which would in turn result in:You are quite right there are more than 4 banks in Oz - but the point is whether the dominance of the big 4 is beneficial to consumers, their large balance sheets and advertising budgets does not make for a market of perfect information for the average joe.
This is a matter of financial education, not for the banking system.Bank customers are notoriously sticky, particularly the average joe, they don't move their mortgages/savings when a better deal is on offer at another institution. ASF members probably do, but most people don't.
I’m not sure I follow, could you rephrase?The bank profits are not bad per se, only that their size indicates an inefficient market. If it were not, you would see the spoils from the financial gravy train more evenly distributed amongst the multitude of other financial institutions.
The rate they charge borrowers reflects a combination of each bank’s funding costs, the availability of funding, the credit risk of the borrowers and the bank’s profit margin. This means rate movements do not move 1:1 with the RBA published rates.? Or why increasing rates to borrowers above the RBA is not greedy?
Come on, laziness will never get you a better deal, whatever the system is.If the market is such that banks are able to be "greedy", then this is an inefficient market. Surely, the question as a consumer is, could we get a better deal with a different system.
The guarantee was a kneejerk reaction to an event that led pollies to panic, and may well not be renewed.We don't give government guarantees on all those other things. The government doesn't protect the others as much from competition either. I'm not saying weaken them by opening the market up to additional banks, but I sure as hell don't mind a bit more regulation for my benefit.
All the bluff and bluster about those naughty overpaid bankers lifting mortgage rates doesn't mean much in the real world. Yes, the CEOs are over-paid, but when they put up rates independently of the RBA, it just means the RBA has less need to increase its cash rate. If the banks gave back all their extra rises tomorrow, the RBA would race to make up the difference.
No, it didn't, nor was there any likelihood of it being necessary, because of the health of the banks.WRT privatizing losses (publicly funded), this did not happen in Oz during the GFC,
Michael Pascoe has an interesting perspective on the big 4 rate rises, and it does make some sense:
http://www.theage.com.au/business/making-hockey-and-banks-look-good-20101101-1796h.html
The mock concern about bank rate movements is just one of the cynical games Wayne Swan and Joe Hockey play with us. Well, I hope they're just being cynical – it would be a bigger worry if they actually believed it.
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