Green's Plan to Introduce policy to restrict over inflated interest rate rises

[HamaTime™]

Independents back Greens' bank bill | News.com.au

Basically the Green's want to lock banks down to the nominated interest rate rise, i.e. when it goes up by 0.25 the CBA and the others cannot hike it to 0.45

Now whilst I am against regulation, I do feel the need that some sort of action may be needed to sort out the 'bully boy' tactics of the big 4.

Discuss.

[CSP]

try the political thread?

[HamaTime™]

Wanted a more specific thread, because it's an important point for a work related meeting I'm having next week, want to get some more focused group feedback.

[nathanVY]

Honestly the banks can do what they want. The Government should possibly bring in laws against exit fees, etc so you can leave easily and without hassle. But the labor treasurer "telling" the banks to keep the interest rates down is just a joke what did he think they would say "no worries man, anytime"

If your interest rate goes up and you don't like it, enough to move all your services form that bank to another - then do that! don't complain everyone has to re-assess regularly anyway.

[MasterOfReality]

I don't necessarily agree with it.

As a business, they should be free to do what they want with regards to interest rates. Their obligations are to the shareholders. If I owned my own consulting business, I can hike my hourly rate whenever I want although clients will respond accordingly.

The bit I agree with is the abolishion of exit fees, as that is pretty much holding the customer hostage and restricts competition.

[HamaTime™]

Honestly the banks can do what they want. The Government should possibly bring in laws against exit fees, etc so you can leave easily and without hassle. But the labor treasurer "telling" the banks to keep the interest rates down is just a joke what did he think they would say "no worries man, anytime"

If your interest rate goes up and you don't like it, enough to move all your services form that bank to another - then do that! don't complain everyone has to re-assess regularly anyway.

Agreed, Wayne Swan didn't show much intelligence in doing that.

I don't necessarily agree with it.

As a business, they should be free to do what they want with regards to interest rates. Their obligations are to the shareholders. If I owned my own consulting business, I can hike my hourly rate whenever I want although clients will respond accordingly.

The bit I agree with is the abolishion of exit fees, as that is pretty much holding the customer hostage and restricts competition.

Yep, abolition of exit fees are definately a plus.

My thoughts on the matter:

I disagree with the policy: I am against regulating, because it creates sooo many hassles and burdens the 'free market'

Though I disagree with the rate hike of 0.45c, responsibility is to the shareholders, and the shareholders, financial experts, lobbyists, politicans etc, none of them were happy about it.

To be honest despite we were all expecting it, the RBA didn't really need to increase from 4.5 - 4.75 basis points

Ethical Business is what is needed!

[MasterOfReality]

The thing is, what defines ethical business? To enforce ethical business would mean some form of intervention.

Politicians won't be happy with it because it reduces the disposable income of their constituents.

[minux]

Why are exit fee's such a big thing? When your dealing with hundreds of thousands of dollars, why the #### are you whinging about a few hundred?

I'd suggest consumers shop smarter int he first place before bitching about fee's THEY KNOW ABOUT WHEN SIGNING THE DAMN CONTRACT. As for interest rates, of course when money costs more to borrow the banks will charge more to lend it, our RBA rates mean squat when the banks are not borrowing as much from the RBA.

#### stupid people shit me. Look at the state many countries are in because of governemnts stopping banks from profiting...our system works, leave it as is and tell the whinging pricks who over borrow to start getting some basic financial training.

[Reaper]

My view is that it's government's role to establish conditions that encourage free & open competition. In most industries 4 large players would be sufficient to get that however for some reason in Australia it doesn't work. I would suggest that ASIC need stronger powers in collecting evidence of anti competitive behavior such as collusion, price signaling, cartel like behavior etc. Actual price regulation by govco will only move the problem else where within the banking system.

We all see big profit numbers from the banks etc but I'd like to also see it as a % of risk and overall turnover. ie - profits vs loans made by the bank vs loans made to the bank. This information is probably available in their annual statement which is publicly available if anybody can be bothered looking.

Reaper

[nathanVY]

Solution = Abolish preference voting system.

That way we don't have these half-assed government solutions, fabricating votes - you put #1 on a certain party because you want them to win parliament... not the other guys you put at 3 or 4.

EDIT: Minux - bloody spot on mate.

[HamaTime™]

The thing is, what defines ethical business? To enforce ethical business would mean some form of intervention.

Politicians won't be happy with it because it reduces the disposable income of their constituents.

Exactly. Politician's just wanting to please their constituents

Why are exit fee's such a big thing? When your dealing with hundreds of thousands of dollars, why the #### are you whinging about a few hundred?

I'd suggest consumers shop smarter int he first place before bitching about fee's THEY KNOW ABOUT WHEN SIGNING THE DAMN CONTRACT. As for interest rates, of course when money costs more to borrow the banks will charge more to lend it, our RBA rates mean squat when the banks are not borrowing as much from the RBA.

#### stupid people shit me. Look at the state many countries are in because of governemnts stopping banks from profiting...our system works, leave it as is and tell the whinging pricks who over borrow to start getting some basic financial training.

Last comment was quite spot on.

I know what your saying about the bank fee's, but I still don't see why you need to pay to leave. Pay to enter yes, pay to exit???

My view is that it's government's role to establish conditions that encourage free & open competition. In most industries 4 large players would be sufficient to get that however for some reason in Australia it doesn't work. I would suggest that ASIC need stronger powers in collecting evidence of anti competitive behavior such as collusion, price signaling, cartel like behavior etc. Actual price regulation by govco will only move the problem else where within the banking system.

We all see big profit numbers from the banks etc but I'd like to also see it as a % of risk and overall turnover. ie - profits vs loans made by the bank vs loans made to the bank. This information is probably available in their annual statement which is publicly available if anybody can be bothered looking.

Reaper

Yes, exactly, encouraging a free, competitive market where prices are driven down by competition and service levels and quality driven up. Price regulation will create other problems you are correct (as I said I disagree with the policy for that reason).

Good comments.

[MasterOfReality]

Thats right, I don't think no one is whinging about the amount of the exit fees when you take into account the size of loans, its the principle on which they are based.

[nathanVY]

Maybe no one is whinging except the government and the media making a fuss.

[minux]

You pay to leave because the banks lose income from you terminating your contract. Be thankful they dont charge you what they COULD earn if you served out your loan with them.

Sadly, people think borrowing a bucketload of money is doing the bank a favour. All exit fee's are int he contract you sign...do not like the size of them? DO NOT SIGN THE BLOODY CONTRACT.

[nathanVY]

do not like the size of them? DO NOT SIGN THE BLOODY CONTRACT.

[piston_broke]

As far as i'm concerned, the banks didn't put the interest rate up enough, like about 17%, but still within my means, when i was paying off my place, now wouldn't that be nice.
And yea, have to agree entirely with minux

[Joe Peeps]

Another key point is the RBA doesnt have enough money to supply the borrowing needs of the country - hence the need to source from the open market. As always this is a knee jerk reaction without the proper knowledge and understanding of how the system works.

By capping the rate rises/changes in line with the RBA the ability to borrow will be hampered considerably - the flow on effects would be disastrous. There really seems to be a sense of entitlement amongst the community that they should be able to borrow money whenever they want.

Abolishing a 700 "deferred establishment fee" or similar makes no difference at the end of the day - id expect to see an increase in application fees sometime next year.

[minux]

If people want to see where Australia is heading. Look at Ireland.

[Julie]

I think the greens are retarded. Banks exist to make money, they are a business they should be allowed to do this without stupid government interference. People who borrow money know what they are getting themselves into, if they choose a variable loan they know they are taking a gamble and at the mercy of the banks, if they are not comfortable with this they should choose a fixed loan rate, pretty simple stuff really.

[soop]

Just another way to protect morons from themselves...

I've more an issue with the power company increasing the cost by about 200%. Our bill went from $75 over 3 months to $200...

[CSP]

If people want to see where Australia is heading. Look at Ireland.

oh yeah.....

[minux]

LOL, Greens got smashed at vic elections LMAO, poor bob brown cannot be foudn anywhere, funniest thing to happen yet.