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Interest Rate Drop - Major Banks Ignore...


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OFFLINE   Commander Slicer #1

  • 5,523 posts since
  • March 2003

Posted 07 December 2011 - 02:50 PM

As we all saw, the Reserve Bank reduced the interest rate by 0.25% - apart from a couple of relatively minor banks, the big four have done nothing.

Although the argument that they need to remain solvent is what is being used, it's pretty hard for that to have much sway given how many billions the banks are making in profit.

Aside from the obvious (ha ha) moral implications, failing to pass on the rate cut also undercuts the Reserve Bank's (and the Government's by proxy)'s monetary policy as, many know, interest rate movements are used to stimulate or contract the economy - ignoring rate movements does not allow for this corrections/adjustments to properly occur.

Personally I think with all the waffle about how wonderful privatisation and de-regulation is, cases like this where the banks can and have ignored rate cuts so they can maintain profits, never mind the economic consequences or economc resolve from the Reserve Bank, should not be allowed - why is it not legislative requirement that all lenders must lend at the official RB rate?

No doubt, if the rate was going up, the banks would raise their rates, so the argument that they know better about the economy has little substance and as far as I am concerned, paints the banks exactly as many modern corporations seem to want to be - shareholder-at-any-cost profit driven and completely detached from their responsibilities.

Thoughts?

Edited by Commander Slicer, 07 December 2011 - 02:51 PM.


OFFLINE   Mike Retter #2

  • 3,433 posts since
  • May 2008

Posted 07 December 2011 - 03:28 PM

I totally agree with you. We need to make our credit unions bigger. these banks need to be named and shamed.

What about the slogan "More give, less take" from the NAB? I would be first to shame them if they dont drop their cash rate.

OFFLINE   SydneyCityTV #3

  • 6,298 posts since
  • November 2011

Posted 07 December 2011 - 04:15 PM

Funny how banks are slow to lower rates when they go down, but almost instantly raise them when rates are up!

What about the slogan "More give, less take" from the NAB? I would be first to shame them if they dont drop their cash rate.

I think that you'd want to shame them if they're not first to lower interest rates. More Give, Less Take? Yeah right! :rotfl:

OFFLINE   Mike Retter #4

  • 3,433 posts since
  • May 2008

Posted 07 December 2011 - 04:30 PM

Someone facebook them (NAB) to buggery please (im not a member).

OFFLINE   Big Dan #5

  • 18,503 posts since
  • July 2003

Posted 07 December 2011 - 05:42 PM

To me, banks and credit unions are all the same. I left our local credit union when they merged (and managed to dupe nearly 100% of the members into voting into it) and kept charging me something to the order of $20 a month just for an everyday transaction account. I refuse to be charged for accessing MY OWN ATM, and for any transaction I do at a shop - that's exactly what the old Hunter Mutual did, and that's what the new New England Credit Union/Community Mutual Group does. And as an aside, the NECU are just like Prime7, take for fricken' pick - you are either NECU or Community Mutual. Pick a name and move on.

I actually left HM/NECU for the NAB. I have never had a problem with the NAB. Only fees I have been charged are for accessing other ATMs, and those fees were put on by the ATM's operators, not NAB. I would've stayed with the NECU if they had a flat rate for unlimited transactions at any ATM and at any shop - say, like $5 a month.

I think there needs to be a national standard as for bank fees - how much they should be, how they should be revealed to customers, what they entail, etc...
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OFFLINE   Commander Slicer #6

  • 5,523 posts since
  • March 2003

Posted 08 December 2011 - 08:22 AM

Well those sorts of things were possible before deregulation... but now the "market" will regulate itself... what actually has happened is all the majors (and minors) just collude and charge the same ridiculous fees, don't decrease rates and cut services - competition's a great thing but the market can't regulate itself as it, by virtue of all capitalism, the goal is to make the greatest return for the least outlay... ie things that aren't profitable are cut.

With the rates, Swan can crow about how great deals there are out there but the reality is it is a pain in the arse to change lenders and why should people have to? The RB's role is ineffectual (and so is the Government's monetary policy), if something isn't done - the banks are playing it close, they aren't the slightest bit fussed if a few customers piss off to the small lenders but if they can get away with not dropping the rates and the worst that happens is some irrelevant rhetoric from the Treasurer, and minor public backlash (nothing that a few million dollars of BS ads can't fix), they're laughing and they know it.

If Swan was worth his salt, he'd be making far more of a big deal about this than he is as it undermines the economy as a whole.

OFFLINE   icat #7

  • 7,156 posts since
  • February 2005

Posted 08 December 2011 - 05:45 PM

I think the key point that has been missed is not about Banks passing it on or not rather than ANZ decison to review its rates every month and alter them independently of the RBA.
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OFFLINE   icat #8

  • 7,156 posts since
  • February 2005

Posted 08 December 2011 - 05:48 PM

Well unless you regulate that its mandatory that banks pass on the RBA cuts then Banks will do what Banks do best i.e look after themselves first, People do have the option to change lenders. I guess if you want to change the Banks grip on things then you need to move lending institutes in droves.
Nine reasons to watch Titus Pollo on Rome.
Prison Break on 7

OFFLINE   Reuder7 #9

  • 20,027 posts since
  • February 2005

Posted 10 December 2011 - 08:48 PM

Well unless you regulate that its mandatory that banks pass on the RBA cuts then Banks will do what Banks do best i.e look after themselves first, People do have the option to change lenders. I guess if you want to change the Banks grip on things then you need to move lending institutes in droves.


Consumers need to wake up and take action themselves. I find it quite hypocritical of individuals complaining about government interference and bureaucracy, but when it comes to the 'big bad world of banking and supermarkets' we can't get enough of government intervention. Ofcourse there's a place for government, but many, especially when it comes to the banks and supermarkets want to sit back and let someone else do the heavy lifting.
The rate outcry has also spread to credit cards. People need to learn to live within their means. Credit cards are a luxury, if you can't pay it off within the interest free period (atleast 45 days, up to 3 months), you're clearly not managing your finances properly.