Budgeting for being caught and ensuring your too big to fail (ODT)
The Wall Street giant is also facing the prospect of another settlement with the DOJ which threatens to raid its profits. The staff are no doubt ready, and additional money is already being put aside for regulatory reasons. With supreme insincerity, the bank promises to reflect about this latest chapter in international financial kleptocracy. “There are important lessons to be learned from this situation, and we must be self-critical to ensure that we only improve from the experience.” The sinner, chastened, readies for the next transgression.
Mahatma Gandhi, in one of his more quoted remarks, observed that “the world has enough for everyone’s need, but not everyone’s greed.” The Goldman approach has a different take to his sagacious observation: the greed will always come before the need and there is ample amount to be had. It is a philosophy that has enabled it to escape the calamities of the subprime market collapse in 2009 and survive such catastrophes as the Wall Street crash. While it has received something of a battering, the company has seen worse. Expect much and more of the same: greed sells, and while stumbles are bound to take place, budget for them.
Most key savings and term deposit rates are below the inflation rates, eroding savers’ purchasing power
Standard savings accounts returns at major banks drop to around 0.1pc once introductory rates expire after a couple of months
Looking for better returns for savings means taking on higher risk
Australians are carrying the 2nd most personal debt burden in the world will they now be paid to increase it? Wages are and have been stagnant for years production is up so who has profited from growth if personal debt has increased so much? Not the average Australian. Immense effort is being made to force fixed savings into the market. The banks dont lose by the way they continue to charge for their services. Debt is a good way to keep a nation’s work force obedient and compliant while income and wealth gaps grow. It’s what appears to be a respectable form of human bondage under the surface but human bondage nevertheless. (ODT)
Denmark’s third largest lender, Jyske Bank, is in effect paying home owners to borrow at the moment, with a standard mortgage of -0.5 per cent; now that’s value.
Jyske can do this by borrowing money from institutional investors at a negative rate — and there’s plenty of negative interest rate paper floating around at the moment, somewhere north of $US15 trillion ($22.37 trillion) in value — and passing it on to their customers, who then can pay back less than they borrow.
The bank clips the ticket with the usual fees and charges, but leaves the customer gruntled and still makes a tidy profit on the loan.
A recent IMF blog entitled “Cashing In: How to Make Negative Interest Rates Work”, explains its motive in wanting negative interest rates — a situation where instead of receiving money on deposits, depositors must pay regularly to keep their money with the bank.
“Without cash, depositors would have to pay the negative interest rate to keep their money with the bank, making consumption and investment more attractive,” it said.
But one year on from the banking royal commission, faith in our financial institutions — and the regulators who failed to police the banks’ bad behaviour — isn’t exactly at an all-time high.
TOTAL CONTROL FORCED SPENDING INCREASED DEBT
Our nation sighs with relief this week. Our banks are safe. Federal Treasurer, former Minister for resources and Northern Australia, energy, environment, serial failure and currently unelected Prime Minister, Scott Morrison’s Deputy, Josh Frydenberg, will not get tough on financial companies just because a Royal Commission uncovers incompetence, theft, forgery, impersonation, fee-gouging, usury amongst other criminal conduct while regulators looked the other way.
“Getting stuck into banks could hurt the economy”, he warns. Ah, yes. The economy – that lonely little petunia which blossoms on the dung-heap of consumption. As Richard Denniss observes, Australians have been told for decades that as long as the amount of stuff bought is growing we must be doing well. Yet it’s clearly never been the case.
As the world marks the 10th anniversary of the worst financial crash in recent history, it’s worth looking into who was held responsible for knowingly issuing fraudulent mortgages that led to the crisis.
Two of Australia’s financial powerhouses face the threat of class actions for ripping off their superannuation clients.
Plaintiff law firm Slater & Gordon on Tuesday revealed it was seeking expressions of interest for a class action against financial institutions in the wake of damaging revelations about their treatment of customers.
The Commonwealth Bank has spent seven years denying and covering up the role of its staff in a $76 million loan fraud that has left unwitting customers homeless.
Australia may be rank outsiders to make the football World Cup final, but we are global finalists when it comes to household debt.
As things stand, it would take a year and 79 days of Australia’s total economic output to pay off what we owe — and that doesn’t include the interest we’re accruing. That’s more than twice as much household debt as Greeks have.
Only the Swiss are more indebted and, while we may not beat them on the football field, we’ve now got the Danes licked for household debt.
With so much debt, Australians also have high repayments, averaging 15.5 per cent of incomes, second only to the Dutch at 16.6.
Rejecting banks’ excuses for paltry raise proposal, union leaders say ordinary employees shouldn’t have to pay to price for bad loans
Macquarie’s top 10 executives collectively received $119.4 million, which puts even the CEO pay packets at the Big Four banks to shame. This will be the case for some time if the banking royal commission is anything to go by.
You think the 4 Banks overpay their Execs. Coupled with millions in payments we each and every Australian citizen guaranteed that they wouldn’t go broke. Tell me why there wouldn’t be a high risk culture that believes it’s untouchable? The sharehoders might be able to move the who sits in the boardroom chairs but they haven’t managed to change the operational culture which has simply become Wall St (ODT)
Austrac may or may not have given CBA assurances that it would warn it ahead of any action but it is consistent with what we know of the banks and their regulators that they expect to be forewarned of any regulatory action and they expect to be given – and almost always are given – the ability to negotiate an out-of-court settlement on any issue of substance.
From the man who can’t keep his mouth shut, Abbott’s advice
The Abbott government’s 2014 budget set in motion $120 million of cuts to ASIC’s funding over four years, leading to the loss of more than 200 staff. At the time, the government emphasised a greater role for self-regulation instead of government intervention.
Former ASIC chair Greg Medcraft was vocal in his criticism of the budget cuts and pushing for tougher penalties for misconduct.
Former prime minister Tony Abbott.
In 2016, the Turnbull government restored the funding and boosted the regulator’s investigative powers.
The Liberals were right. There’s no need for a banking Royal Commission. It’s just fostering ill will and leading to a lot of complaints from people. Ok, not perhaps, the dead clients that the Commonwealth Bank continued to charge for advice even though they knew that they’d died. Let’s be real here, people. Dead people aren’t in the best position to make their own decisions so they probably needed the advice more than anyone. I have it from a source that in many cases the advice was: “You should stop paying me now that you’re dead.” Not one of these dead clients are complaining that the advice was wrong, even if it wasn’t heeded.
Does the Treasurer really think the public is so dim?
“I’ll organise it with the banker,” Arico was recorded telling his mate. “You come in the Commonwealth Bank, we see Hasan* the bank f—ing guy, give your details, sign the documents, to go for the loan and let me worry about it.”
“Even better … We go and see Peter*… [he] is a hundred percent. This guy is the best … and whatever he’ll need to do, he’ll do.”
At 71, Linda Schmidt should be enjoying retirement.
But for the past two years the Perth nurse has been crippled by debt, and fighting the banks.
“I just survive from day to day, black dog trotting around behind me,” she told 7.30.
She owes more than $3 million to half a dozen lenders.
The loans cover her own home and, not one but 11, investment properties.
Her superannuation has plummeted from more than $500,000 in 2012 to just $540.
Now she is faced with the prospect of losing her home.
Growing mortgage stress has led to consumer advocates calling for the banking royal commission, which meets for public hearings in Melbourne tomorrow, to examine irresponsible mortgage lending and the way banks assess whether loans are affordable.
‘I feel like a punchbag’: Schmidt
42 per cent of home loan customers told banks they had incomes in excess of $500,000 last year
Westpac is the first bank to face ASIC court action over irresponsible lending allegations
Mortgage contracts can be voided if the bank provides credit to someone who cannot afford it
Remember when banks provided a service and didn’t just service the customers?
Well that’s when they were reminded it was a free market and the governments got out of the banking business (old dog}
The Commonwealth Bank is locked in the early stages of damage control as it confronts allegations it allegedly breached anti-money laundering rules.
Market Forces conducted a detailed survey of the big four banks’ project finance – lending to a specific mine or project, rather than a corporation – since the big four supported the Paris agreement to limit global warming to no more than 2 degrees.
Leaked news of a budget bank levy wiped $14 billion from the banking sector in one day — will anyone be investigated for insider trading?
The president is set to scale back the 2010 Dodd-Frank financial-overhaul law and roll back an Obama-era financial regulation.
An investigation into the role of one of the most influential banks in the world.
A first home buyer has lost a $41,000 deposit on a St Kilda apartment after the National Australia Bank walked away from the loan at the last minute due to the property’s size.
Dr Evan Jones continues his analysis of corrupt self-regulation in the banking sector, demonstrating the critical need for a Royal Commission.
Dr Evan Jones tracks the criminal history of self-regulation in the banking sector, demonstrating the critical need for a Royal Commission.
Banks are exploiting the fact that we are bad money managers.
Labor is pushing for a banking royal commission, while the Coalition has promised increased funding to Asic. Here, we’ve collated some of the scandals in the banking and financial sector over the past seven years
What do PM Malcolm Turnbull, Premier Mike Baird, and NZ’s PM John Key have in common? They were all investment bankers – for Goldman Sachs, Deutsche Bank and Merrill Lynch respectively. Like Costello, and Hockey with Medibank Private, Baird and Key have both been able to sweet talk their constituents into selling off billions of…
Is there any antipathy greater than that we reserve for the banks? It’s true today as it has always been. And now, for normal punters, banks have become a law unto themselves. That’s why they’re backing a royal commission to the hilt.
Goldman Sachs has agreed to pay a $5.1 billion to settle a U.S. probe into allegations that it misled mortgage bond investors during the GFC.
Dr Evan Jones continues his six-part analysis on the series of parliamentary inquiries into systemic bank corruption as the victims of fraudulent foreclosures continue to wait for justice.