New rules for banks, just not here

You don’t have to be a rocket scientist to figure out that banking in Australia and New Zealand needs fixing. Until now, the banks have basically done what they like, leading to major imbalances in the economy and ballooning levels of personal debt.

While leading economists and financial commentators differ over how banks could be better regulated they mostly agree that banks should be better regulated.

True, our big banks didn’t collapse like many overseas ones did. But they still didn’t survive the global financial crisis on their own. Taxpayers supported them by picking up their risk, after governments on both sides of the Tasman rushed to lend a hand.

And banks passed on their increased borrowing costs to customers. The average Kiwi and Aussie paid more to service their debts so the banks could keep making massive profits.

You’d think there is more than enough evidence for Kevin Rudd and John Key to jump into action to help level things up. But no. Canberra and Wellington keep taking the side of high paid bank CEOs over bank customers and staff.

In New Zealand, the government has actively taken the banks’ side. They pulled their support for an official inquiry into bank interest rate setting after the banks complained. They cut the fees banks pay to be part of the guarantee schemes. And to top it off, didn’t say a word when courts found some banks guilty of tax evasion to the tune of hundreds of millions of dollars. The NZ government’s message to the banks is simple: please, do whatever you’d like.

So it’s up to us to make sure banks and politicians hear what we’ve got to say, and get that doing nothing is not an option. We might not have the money banks do to influence politicians, but we’ve got more votes. So add yours, by filling in the survey at http://betterbanking.questionpro.com/ and let the politicians know it’s time for better banking now.

If reform of the banking system can be a priority for Barack Obama, Gordon Brown and most European leaders, Kevin Rudd and John Key can play their part too.

Andrew Campbell, Campaigns Director, Finsec