Wednesday, October 02, 2019

National wants to deregulate banks

The Reserve Bank is currently planning tighter banking regulation, requiring banks to hold enough local capital to survive a 1-in-200 year financial crisis in order to protect consumers. The big Aussies banks, those foreign leeches who suck $5 billion in profit out of our economy every year, don't like that, because it means they might have to suck a little less for a little bit. And so suddenly, coincidentally, their pawns in the National Party are no longer fans of independent banking regulation:

National Party Finance Spokesperson Paul Goldsmith wants to shake-up banking, by ripping a scab that hasn't been touched for 30 years.

Goldsmith has called into question the independence of the Reserve Bank, responsible for setting interest rates and regulating banking.

He thinks the Government should have a say in how much risk banks are allowed to take, weighing up the cost to consumers of having a faster, looser and cheaper banking system with the need for stability.

You know, the same way they "weighed up the cost" of having faster, looser and cheaper building standards, faster, looser and cheaper regulation of finance companies, or faster, looser and cheaper mine safety. Which tells you how much of a terrible idea this is. It was just over a decade ago that banks crashed the global economy by (in part) not having sufficient capital reserves to cover their gambles. National may have forgotten that. But I doubt voters have.