Samuel's Blog

Of course the Government isn’t going to launch a new bank

July 9th, 2009 at 02:18pm

It already has a bank, it’s called the Reserve Bank, and it’s the only bank the federal government should have. Don’t forget, it was the federal government which got us in to this situation of having four major players swallowing massive swathes of market share…remember the “bank deposit guarantee”? The federal government’s bizarre and misguided attempt to solve the global financial crisis, in which they decided to guarantee deposits in to banks, effectively prompting people to pull out of non-bank investments en mass, causing further problems on the stock market.

Thankfully the government and the opposition agree that a new government retail bank is not a good idea, despite the bleating of six economists.

Australia’s big four banks were in the top eight banks in the world, which provided confidence in the nation’s financial system and ability to recover from the global recession, [Home Affairs Minister Brendan] O’Connor said.

“So I don’t think there’s any particular need to look at the systemic review of our financial system, it’s very sound.”

The federal opposition does not support the notion of a “people’s bank” to rival Australia’s big banks but would support an inquiry into Australia’s financial system, Opposition Leader Malcolm Turnbull says.

I’m pleased that we have unity on this issue. The less government interference we have in the retail banking system, the better. Eventually, once enough people are sick of the “big four” exploiting their position, we will see a natural shift toward other financial institutions. How long, or short, that period of time is, depends on how badly the “big four” exploit their position.

Samuel

Entry Filed under: General News,Samuel's Editorials

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