Gordon Campbell on yesterday’s cosmetic banking reformsFirst published on Werewolf
The elephant in the room as the government carries out its latest bout of tinkerings with our banking practice is the
extraordinary level of profit-taking still being extracted by the Australian Banking Gang from ordinary New Zealanders.
Yes indeed, yesterday’s moves to put a banking deposit scheme in place will protect savers from the very, very unlikely
event of a collapse of our banking system – in effect, the government is creating the banking equivalent of an
Earthquake Commission for savings deposits – but it will do next to nothing for the borrowers who are on the receiving end of current practices.
Meanwhile, that elephant in the room keeps on getting bigger and bigger, largely unmolested by oversight from the
Reserve Bank, the Commerce Commission or the Financial Markets Authority. Last year for instance, ANZ made a record
$1.99 billion profit in 2018, which works out at $416 extracted from every single New Zealander
. BNZ racked up a $1.029 billion profit the same year
. Westpac’s profit was up by 5%, to $1,017 billion as well
. In June 2018, ASB reported a 10% rise in profit to $1.177 billion
Have those profit levels, could those profit levels possibly be the product of fair and square dealing that puts the needs of the customer first?
That’s even more unlikely than a banking collapse. So the fretting and fussing by Finance Minister Grant Robertson to
ensure that this current system of extraction is a little bit more stable, a little bit more secure and a little bit
more compliant with best practice overseas is rather beside the point. The reason that voters think the banks are
bastards is not because they’re worried about a run on the banks, or because a top executive or two might be fiddling
with their expense accounts. Its because they feel like sitting ducks when it comes to predatory fees, abusive loan
conditions, and harsh foreclosure and recovery practices, amidst a banking culture where every single added operational
expense for the banks seems to be automatically passed onto borrowers – as witness the Reserve Bank’s looming request
for the Aussie Banking Gang to hold more capital in reserve. Boom! That request is being assumed to be an extra expense
that will fall largely upon bank customers.
We don’t have the watch-dogs willing or able to prevent such behaviours. Little in the package announced yesterday will
improve the situation for bank customers in their normal day-to-day dealings with the banks. In that respect, it is pure
spin for PM Jacinda Ardern to claim that we don’t need a Royal Commission, because her government is getting on with the
job that a Royal Commission into banking would take two years to recommend. That’s simply untrue. Across the Tasman, the
Australian Royal Commission into the banking industry unveiled a whole host of dubious practices. Its list of 76
recommendations included for instance, setting up a compensation and remediation scheme for the victims of predatory
banking that could well top $6 blllion. Also, the Australian Royal Commission envisaged new structures and procedures
for the banking industry’s involvement in superannuation packages, in the ways they handle farm debt and in their
lending practices and recovery methods with respect to small and medium scale business.
Tellingly, Commissioner Kenneth Hayne also urged the Australian Securities and Investment Commission (ASIC) to be more
inclined to launch prosecutions of banks and financial services companies, whenever malpractice has been detected, to
deter les autres. “Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly
punished,” Hayne wrote in his report. Basically, Hayne wanted to see a climate prevail where the law enforcement agency
enforces the law from a starting point where breaches result in court action - rather than, as the ABC news organisation
put it, pursuing “ the softly, softly approach that has encouraged the major banks to treat ASIC with contempt.”
There’s no sign of that same healthy suspicion of banking practice being evident in New Zealand, at the regulatory
level. Yesterday’s announcements were the “softly softly approach” written in the finest of fine prints. To state the
obvious, when funds are being funnelled offshore at the current rate by foreign-owned banks, it is harmful to New
Zealanders and to the New Zealand economy. Yet we seem to lack the political will to denounce this situation and equip
our watch-dogs at the Commerce Commission and FMA to examine the structures of profit-taking, with a mandate to
prosecute the offenders.
At best, we appear willing only to denounce the behaviours of one or two top executives, or the workings of this or that
staff incentive scheme. Amusingly, there has even been talk this morning of a ‘naming and shaming’ sanction being taken
against executives whose behaviours may cross the line. Problem being, the Aussie banks are shameless; as they prove
every year, when announcing their annual results.
Footnote One: For the record, and in the unlikely prospect of a banking Armageddon, a $30,000-50,000 guarantee will be put in place
per individual account, which would serve to re-imburse about 90% of bank savers should a collapse ever occur.
Elsewhere, in countries that already have such guarantee systems in place, the protective ceilings are higher:
$NZ263,565 in Australia, $NZ164,259 in the United Kingdom, $NZ378,901 in the US and $NZ111,886 in Canada. As yet, it
remains unclear just how the NZ deposit scheme will be funded. Yesterday, Robertson talked about a bank levy as being
the most likely source, with taxpayers liable in the meantime until the scheme’s funds have been built up. Given the
banks’ penchant for blithely passing on their operational costs, it looks as if ordinary New Zealanders will be funding
this security scheme - either indirectly as bank customers or directly, as taxpayers. Final details are due early next
Ah, those “provocative” Iranians have been at it again. Shooting down a US spy drone that was flying over their own
territory. Walking away finally from their full compliance with a nuclear deal that the US ripped up and walked away
from over a year ago. Supporting the resistance in Yemen to the humanitarian catastrophe that the Saudi/Emirates forces
have inflicted on the civilian population. According to US President Donald Trump, Iran is the world’s number one funder
of terrorism. When lies are repeated often enough, they take on their own legitimacy.
For the record, the world’s number one funder of terrorism is, and always has been, Saudi Arabia. It was the Saudi
kingdom that provided the Salafist ideology and seed funding for al Qaeda and Islamic State, contributed nearly 80% of
the 9/11 attackers, kidnapped the president of Lebanon, murdered Jamal Khashoggi, threatened to invade Qatar, helped to
crush popular uprisings for democracy in Bahrain and (currently) in Sudan, and has been directly responsible for what
the UN has called the world’s worst humanitarian crisis in Yemen. Yes, Iran has provided aid to its Houthi allies in
Yemen – but this has been only a tiny amount of assistance when compared to the military aid that the US and UK have
poured into the Saudis and Emirates for their use in bombing schools, hospitals and water treatment plants in Yemen,
thereby fostering a cholera epidemic that has claimed thousands of lives.
Regardless, our mainstream news outlets continue to (a) recycle the US Orwellian myths about Iran’s ‘provocations’ while
(b) treating the Houthi rebels as being the obedient proxies of Teheran. They’re not. The Houthis belong to a different
Shia sect called the Zaydis – one that opposes the rule of ayatollahs – and the list of grievances held by the Houthi
family-led rebellion in the north of the country against the Yemeni central government (that the Saudis support) goes
back for decades. Given the atrocities being committed by the Saudis in Yemen, the Houthis have been given ample motives
for attacking the tanker trade in the Gulf, without any prompting or advice from Iran, which has little or no ability to
control how the Houthis take their revenge.
To repeat: the terrorists that have attacked the West over the past 20 years have almost entirely been Sunni jihadists
professing a Salafist ideology – and the birthplace of that ideology and its main source of funding has been Saudi
Arabia, not Iran. Basically, the House of Saud aims to destroy Iran as a regional rival, and seeks to reduce the Shia
majority in Iran (and in Iraq) to obedience to its will. We should not be choosing to be mere onlookers as the entire
Middle East falls under the control of the brutal tyrannies that rule Egypt, Saudi Arabia and the Gulf states.
Footnote : Far from controlling the Middle East, the Iranian government of Hassan Rouhani doesn’t even control Iran. There are at
least three centres of power in Iran ; the government, the Revolutionary Guards headed by the legendary general Qassem Soleimani
, and the religious authorities headed by the Grand Ayatollah and Supreme Leader, Ali Khamenei. In reality, Soleimani
and the mullahs wield far more economic and ideological power than Rouhani. Sanctions may hurt the civilian population
and undermine Rouhani’s relatively liberal elected government, but they also enrich the Revolutionary Guards and the
hardline mullahs who control the smuggling routes and black economy, and who welcome the US threats as providing a
unifying legitimacy among the public, for their own autocratic rule. What the hardliners in Teheran had feared most was
the opening up of Iran to the outside world via the anti-nuclear deal, and related trade and tourism. In that respect,
the advent of Trump has been a godsend to them.
Mark Ronson, Angel Olsen
Since her My Woman album was released in late 2016, Angel Olsen has been restricting herself to the occasional guest appearance. This time
she’s hooked up with hitmaker/producer Mark Ronson of “Uptown Funk” fame, and their “True Blue” collaboration is from
Ronson’s moody break-up album Late Night Feelings…
Talking of hitmakers, Caroline Polachek’s terrific previous band Chairlift offered any number of smart electropop tracks
that should have been bigger hits…This admirable solo effort “ Door” is likely to go the same way, of falling
exquisitely through the tracks. Beautiful video though with greyhounds, and with any number of Freudian doors.
For old times sake, here’s Chairlift with their great “I Belong In Your Arms” track, sung charmingly this time in
Japanese by Polachek, a polymath fluent in the language.