Banks & Credit Cards

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Originally Posted by Bigbjorn

I would like to ask our Treasurer and Minister for Finance what their government plans to do to get interest rates back up where they should be. Their government has now served two terms and done nothing to get rates up. The Reserve has just reduced the official rate again. For too long now borrowers have been stealing the use of investors money paying negligible interest. My generous bank has just offered me 2.5% on a term deposit. FFS, the real rate of inflation is 5 to 7%. The long term bank deposit rate should be at least 10%. Brokes, bums, and borrowers should be the lawful prey of the investor not the other way around. I don't care if they have to pay high rates on their borrowings. No-one is holding them at gunpoint forcing them to borrow. It is their choice. I want a fair return for the use of my money.

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I understand where you're coming from. I'm 74. When I was growing up I bought my first car (FC Holden Special) from Reg Hunt via I.A.C. (finance co) at around 8-9%, bought our first home in 1969 probably round the same rate,..and then I remember these finance "rates" of various descriptions, going up to 18%,..as high as 22%(how people repaid these loans I don't know!) in some cases, and yes, I've had term deposits giving me a very nice return.
So now we have the current cash rate of what 1.5% & home loans around 4%, & the RBA is still going to lower rates again,"to stimulate the economy"???!!!..Well I say that a few more percentage points ain't gonna make any difference "to stimulate the economy",...we've been hearing this reason for several years, and if it is a fact that the economy needs "stimulating", then obviously lowering interest rates to almost zero ain't the answer.
Pickles.

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Originally Posted by DiscoMick

Westpac only cut by 0.2 and pocketed the other 0.05, following ANZ cutting by 0.18. This is despite the cost to banks raising money having fallen.
The American banks caused the GFC and our major four see no better.
Go to a smaller bank for a better deal. There are plenty out there. When we last refinanced through a broker we compared 20 and chose BOQ.

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Incorrect.
ANZ did NOT pocket the balance. You have no idea what the borrowing costs are, or how the bank's operating costs may have risen. I suggest to you that the bank has simply made a proper commercial decision based on a whole range of issues, bearing in mind that there would be plenty, like yourself (and Disco, fair enough my friend you are entitled to your opinion) who would make their displeasure known.
You are probably not aware that several years ago ANZ cut its dividend, for the same "sound commercial reasons". That dividend still has not been restored to what it was, for the same reasons.
I worked for ANZ for 40 years, so I have a reasonable knowledge of what goes on. My daughter has a sizeable mortgage with ANZ, & she has not been able to find a lower rate anywhere else, despite trying BOQ & Bendigo Bank.
You cannot compare our Banks to ANY U.S. Banks, which operate on an entirely different structure. During the GFC not ONE bank customer lost any money via a "collapsed" bank in Aus. NOT ONE. Our "Four Pillars" Paul called them.
In fact, during the GFC, one of the major reason we were relatively OK was because of the strength of our 4 big banks,...Rudd & Gillard confirmed this MANY times. Now of course,it's "politically correct" to "hammer" the banks. All I can say is that some people have short memories.
And, so that some don't think I'm entirely "blind", I'm not saying that Banks don't make mistakes, who doesn't (make mistakes), so of course they do, but it would be nice to hear some people acknowledge that the banks have helped squillions of Aussies in a very positive & helplful manner, these helpful instances far far outnumbering instances where they might have stuffed up.
I worked in a department where our focus was collecting on, & restoring to "health", loans that were severely in default. It was ALWAYS our focus to assist & help the customer,...ALWAYS. If it was found that we weren't doing that, it would not have gone down well. It was always our focus to assist, to get the customer going again, to help him, and of course, to enable our loan to be repaid, because if the customer fails, so does our loan,...so we all lose dollars,....not a good outcome.
Pickles.

Im with your Pickles, i've Banked with ANZ for over 40 years and it's been a profitable relationship for both i hope.
Dealing with Govt Dept's and Public Servants is a different story, if only they could hold the same high standards they demand to their own activities, from education to transport to national planning.
Could you imagine Public Servants spending our money being accountable to the same same standard as BEARS (Banking Executive Accountability Regime) they would wet themselves.

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Originally Posted by AndyG

Im with your Pickles, i've Banked with ANZ for over 40 years and it's been a profitable relationship for both i hope.
Dealing with Govt Dept's and Public Servants is a different story, if only they could hold the same high standards they demand to their own activities, from education to transport to national planning.
Could you imagine Public Servants spending our money being accountable to the same same standard as BEARS (Banking Executive Accountability Regime) they would wet themselves.

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"Public Service/Servants"????!!!!!.......SPOT ON.
Pickles.

Perhaps it is worth pointing out that a large part of the success of the big banks in withstanding the GFC was that the majority of their deposits were government guaranteed.

And as for banks being accountable - the banking Royal Commission seems to have uncovered a substantial amount of highly unethical behaviour, and in some cases, particularly the CBA's enabling of money laundering, it is difficult to describe it as anything except downright criminal behaviour.

Plus it was the massive pool of domestic superannuation funds which helped to keep our banks afloat when they couldn't borrow overseas.
Last time we refinanced our broker looked at 20 lenders including ANZ and it was BOQ which offered the best deals.

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Originally Posted by JDNSW

Perhaps it is worth pointing out that a large part of the success of the big banks in withstanding the GFC was that the majority of their deposits were government guaranteed.

And as for banks being accountable - the banking Royal Commission seems to have uncovered a substantial amount of highly unethical behaviour, and in some cases, particularly the CBA's enabling of money laundering, it is difficult to describe it as anything except downright criminal behaviour.

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That is one way of looking at things,...one way.
The other aspect to consider is that that "guarantee" was never needed, because of their strength & operational measures/procedures/safeguards. It never even came close to being called upon, in fact the banks did not ask for it,...it was never needed, it was more "P.R." for the Govt at the time. The prior strength of the "4 Pillars" as recognized by Paul Keating, ensured that our Banks were always going to be "Good". They were during the "recession we had to have", they were during the G.F.C.,...and they are now.
Banks being "accountable"?...Sure, no problems with that at all, in fact I have no issues with ANY wrong doings by the Banks, as long as, I've said before, they are measured against the "squillions" of good things the Banks have done, to help many many Aussies. Many of the "do-gooders" of recent date find it very "convenient" to forget, or disregard, ANY of the good things the banks have done, including the preservation & safety of EVERY Aussie's dollars during the GFC, AND earlier years during Paul's "Recession we had to have". They just like to "get on the bandwagon" for their own reason, and in many cases, their own "Political Gain".
I was very critical of our (ANZ) CEO during the recent Royal Commission, the same as all the other CEO's saying yeah, we've done this, we've done that, ra ra ra, whereas IMHO they could've at least stood up & talked about the good stuff they've done,.....maybe they've never worked in the "rescue" areas, so maybe they weren't aware of how hard we try,...I HAVE, so I know how hard I, & my colleagues worked to help people, and hey, I ain't no angel, it was just part of the job. I just get sick of all the do-gooders who criticize the Banks, and plenty of other people/organizations etc, but conveniently "ignore" all the good things applicable to the identity in question.
And of course, many people "blame the banks" for their financial failure when it was nothing to do with the bank. The customer ran his business, he made the decisions, the wrong decisions, so he ran out of dollars, the bank would not give him any more dollars, so the business failed,.....so it was the bank's fault!!!!!...yeah right.
Pickles.

The guarantee was not used - correct. But it provided the backing to prevent any of the runs on banks that were disastrous for many banks elsewhere.

You are correct in saying that in many cases people get into financial difficulties because they make bad decisions. But in many cases, these bad decisions were enabled and supported by the banks lending money that any proper assessment would have shown was clearly unsupportable.

And then there are the cases where banks bought mortgages from third parties, revalued the security, and called in the mortgages (having changed the rules the mortgage was originally made on), despite the repayments having always been made on time. This led to a number of farmers losing their property and seeing it sold for well below what was a realistic value, simply because all the bank was interested in was getting as much as was owed.

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Originally Posted by JDNSW

The guarantee was not used - correct. But it provided the backing to prevent any of the runs on banks that were disastrous for many banks elsewhere.

You are correct in saying that in many cases people get into financial difficulties because they make bad decisions. But in many cases, these bad decisions were enabled and supported by the banks lending money that any proper assessment would have shown was clearly unsupportable.

And then there are the cases where banks bought mortgages from third parties, revalued the security, and called in the mortgages (having changed the rules the mortgage was originally made on), despite the repayments having always been made on time. This led to a number of farmers losing their property and seeing it sold for well below what was a realistic value, simply because all the bank was interested in was getting as much as was owed.

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I remember a certain bank and its finance company that got into diabolical trouble in the 1980's. They drastically reduced the overdrafts of many businesses and the floor plans of many retailers and demanded they pay up. Right now, if you please. Another bank trick is to revalue the asset base that is mortgaged to secure a farmer's overdraft. Asset value has dropped and is less than the balance outstanding so provide some more asset backing or cash, or be repossessed and sold up for as JD says the outstanding amount.

By the way, during my time in the motor and heavy plant industries dealer floor plan rates were never below 18%.

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Originally Posted by Pickles2

That is one way of looking at things,...one way.
The other aspect to consider is that that "guarantee" was never needed, because of their strength & operational measures/procedures/safeguards. It never even came close to being called upon, in fact the banks did not ask for it,...it was never needed, it was more "P.R." for the Govt at the time. The prior strength of the "4 Pillars" as recognized by Paul Keating, ensured that our Banks were always going to be "Good". They were during the "recession we had to have", they were during the G.F.C.,...and they are now.
Banks being "accountable"?...Sure, no problems with that at all, in fact I have no issues with ANY wrong doings by the Banks, as long as, I've said before, they are measured against the "squillions" of good things the Banks have done, to help many many Aussies. Many of the "do-gooders" of recent date find it very "convenient" to forget, or disregard, ANY of the good things the banks have done, including the preservation & safety of EVERY Aussie's dollars during the GFC, AND earlier years during Paul's "Recession we had to have". They just like to "get on the bandwagon" for their own reason, and in many cases, their own "Political Gain".
I was very critical of our (ANZ) CEO during the recent Royal Commission, the same as all the other CEO's saying yeah, we've done this, we've done that, ra ra ra, whereas IMHO they could've at least stood up & talked about the good stuff they've done,.....maybe they've never worked in the "rescue" areas, so maybe they weren't aware of how hard we try,...I HAVE, so I know how hard I, & my colleagues worked to help people, and hey, I ain't no angel, it was just part of the job. I just get sick of all the do-gooders who criticize the Banks, and plenty of other people/organizations etc, but conveniently "ignore" all the good things applicable to the identity in question.
And of course, many people "blame the banks" for their financial failure when it was nothing to do with the bank. The customer ran his business, he made the decisions, the wrong decisions, so he ran out of dollars, the bank would not give him any more dollars, so the business failed,.....so it was the bank's fault!!!!!...yeah right.
Pickles.

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Would you be so forgiving of a person who defrauded the bank?

"Yes, Your Honour, my client did rip the bank of for a thousand dollars, on the day in question. But he didn't for the other three hundred and sixty-four days of that year. In fact, the bank ripped him off, charging for services not provided. [bigwhistle]