There is no reason why the federal government could not create a QANGO bank to provide a genuine comparison to the big four. There is also no reason why customers of banks don’t treat banks with the distain banks show to them and change institutions, remember banks are constantly surveying customers assessing their pain threshold to changing banks so as know how far they can go without losing customers.

The fundamental law of finance is DO NOT BE LOYAL; decisions by senior bankers are driven by their personal interest not the benefit of stakeholders. The cross board membership through cross shareholdings has led to nepotism and cronyism gone berserk.

Customers need to learn the rules of the game; find the banks’ weaknesses and squeeze them for every cent possible.

The federal government needs to behave in a similar manner; what implement will give them power over banks? Find it, use it. If that means a recreation of the Commonwealth bank then do so. Let the banks whinge – markets are about power and using power. The federal government can do that – why should government guarantees protecting banks be free?

Customers also need to check who owns an apparently independent bank before they change. St George is really Westpac, INGA is ANZ. Why was that allowed to happen? Why are the large banks allowed to take positions in their smaller competition hampering competition? Therein lies a legislative avenue to deal with the big four.

[Deleted for abuse.]

Bitey,You don't understand the reality of money creation.Govt should create the new money to equal GDP and inflation,not private banks.The fractional reserve system of banking must end. http://secretofoz.com/

bitey,

look at what happened in the gfc banks around the world virtually had to be nationalised around the world to stop the financial system collapsing, gmh the bastion of the capitalist cheer squads was virtually nationalised. End result gmh made a profit after 12 months in govt control despite being on its the ropes for the past ten years when it was run by the pvt sector.
never so blind are those who cannot see what is only six inches from their nose

I listened to an economic historian argue the USA rose as an economic power out of a Christian belief of servant leadership aimed at stakeholders benefiting across the board, not a select few. That attends the needs of today and tomorrow. How many finance executives look beyond the next reporting period? Manager’s salaries were 20 times average whereas now it is 480– Gerry Harvey has publicly argued the nonsense of this.

Decisions benefit only a few. Was Norris really the creator of CBA’s increased profit? What was everyone else in CBA doing? The incestuous nature of cross shareholdings and cross board memberships produces such aberrations.

Should finance managers be personally responsible for poor valuations of assets which drive bonuses etc? I wonder what would happen at Macquarie. One can’t eat book entries.

Firstly, if finance institutions don’t believe they should be regulated then neither should their employees. If finance is a market in which the rules of the market work then so should the supply of labour be a market! Regulations were brought in to curtail union power because of national interest. Why is finance different?

Secondly, if markets work why did the GFC occur? It was not an aberration; it was but part of longer term cycles of greed and stupidity – look at the late 1800s for the property bust in Australia. Governments were the ones who had to “fix” the system then.

If markets are so much better at running an organisation why would financial players fear a government controlled bank? If governments are so hopeless the commercial players will walk all around them?

Why do finance organisations need government guarantees? Government should stop being cowards and follow the rules of the market – if you’ve got them by the family jewels squeeze tight till they squeal. Governments have power, use it to serve the general populations’ interest. Gillard, Swan, Abbott and Hockey should join forces and apply the vice.

I’d suggest a reading of Economic history may provide some glaring warning signals that need to be looked at and applied to the finance sector.

Sorry Ken, but the only thing Swan will be able to claim is the prize for the thickest bloke, ever to hold the job. He just may make it as a gate post, [they have to be pretty thick], in the private sector, but I’m not sure he would make it, even there.

When it comes to private enterprise running scared of government, they have good reason to. Just look at the huge rises in the prices of power, & water, government run enterprises are presiding over. Private enterprises go broke. Government ones, just put the prices up, or draw more tax payer funds to stay afloat.

The incompetence of the academic bureaucrats our Labor governments have had running these fail proof business is part of the problem. They always know the tax payer can still be squeezed a little more.

Power & water were cash cows for governments for 60 years, but now look at them. Bureaucratic stupidity gone wild has them on their knees.

That doesn’t mean we would not be better for a new government controlled bank. Even a badly run one could help with competition.

What it does mean is, that it would have to be staffed with bankers, not academics, & that’s where I doubt we could get any sensible outcome.