Dream on Mirko, it isn't likely to happen.

David

The biggest problem with that is, if you earn $100,000 / yr You are regarded as on the bread line. So the bank would be left with no profit at all.

Ralph Norris's claim of one percent return on assets is really deliberately understating the return. The assets Norris speaks about are mainly the amounts owed to banks by people and companies who have borrowed money from the bank. The return should really be stated as a return on net assets. Stated the correct way the return on net assets is obscene and of the order of 20-30%.

As stated in another article today the banking systems were the principal cause of the GFC and the housing bubble in the USA and elsewhere. The Australian banks were only rescued from the consequences of their own stupidity by the Commonwealth Governments customer guarantees.

Limiting the recourse of the banks to the realisable value of the property mortgaged would be an excellent step to limit the banks' future profligacy and stupidity. I am reminded of a conversation I once had with a competent accountant. He stated, "I did accountancy because I wasn't good enough at mathematics to tackle science or engineering", (subjects which require real thinking ability and competence).

The crime of a thief breaking into a bank is that of diminishing the amount of money that bank can lend.

From this standpoint, banks’ CEOs who overpay themselves, can be equated to thieves so grossly stupid as to be insensitive to the damage they cause to the banking system that feeds them.

Probably they are so busy running the Bank and caring about the siphoned money that they cannot devote one single minute to consider the consequences or their conduct.

They share the maniacal addiction of gamblers and public utilities CEOs.

They need help, the help needed by anyone that manages the wealth of a community.

They should be persuaded to follow the example of our politicians and public administrators who always give us a transparent account of how they spend our tax-money and rate-money.

left to their own devices, banks have not only the capacity to enrich a community but to destroy it as well, as witness the last GFC.
If it was the Australian government which rescued the banks from their own stupidity and greed, maybe it behooves them now to accept a few restrictions on their unbridled financial shenanigans.

A 1% tax on profits over a billion is the very utter least that the Treasury can demand of them as an equaliser impost to house the homeless, feed the hungry and educate the ignorant.

This nation owes that to itself, otherwise the notion of "a fair go" which our forefathers fought and died for will be no more than an empty hollow and hypocritical slogan.

This thread seems to be a socialist wet dream.

The assets either belong to creditors or shareholders, for whom the banks need to provide returns. The 20-30% would be fantastic if it were true, but again it exists in the fantasy world of the left wing student.

Top notch CEOs help make their companies huge profits, are highly in demand, and can move to another highly paid job easily.

There is no wet dream here. With the Mining Industry claiming it wants more government [welfare] support in Queensland as a result of the floods. With the top end of the economy being entirely run by Multi-Nationals [foreign one at best], and the en the banks as you say charging citizens like wounded bulls on every digital whiff they can... it is plain common sense that those who are not the shareholders, or not recieving benefits from their high-end wages and profits might squeak.

Thank You Mirko Bagaric for including us, the less engaged sector of society. You are on your own if you are on Newstart. One needs social capital to gain social capital. Works exactly as money does. The more a person gets authentic recognition, the more doors open. Welfare in Australia is an ugly paradigm, a void less you have the right connections. A rort, if the gaze were scrutinised.

As you said, "There are lots of contenders here. Hundreds of thousands of Australians on the Newstart allowance are forced to endure life on $234 a week (about $100 a week less than the pension); more than 100,000 Australians are homeless and nearly one third of Australia's 2.6 million carers are suffering depression - often due to inadequate government assistance."

http://www.miacat.com/

I agree denying banks the opportunity of windfall profits on foreclosures wouldn't impinge on reasonable returns to shareholders.

Another measure to encourage responsible behavior by financiers with negligible effects on profitability would be Tobin's tiny tax. This 0.005% Financial Transactions Tax (FTT) on all corporate financial transactions was first suggested by Tobin forty years ago. The world's financial institutions and their political servants were horrified. They quietly buried it.

The FTT was resurrected as the GFC once more revealed the extent of corporate greed and incompetence. It was spruced up and re-branded as The Robin Hood Tax in a bid to popularize it. Its being embraced by the French was probably the Kiss of Death for the G20. So everyone can relax and carry on with business as usual.

Nevertheless the FTT is a good practical measure. It would be an insignificant impost with huge returns for the public good while potentially relieving the burden on other taxpayers.

Cygnus

Just in case anyone missed it, the Commonwealth Bank's Return on Equity for the half year ending 31 December 2010 was 19.2 percent and the Interim Dividend was $1.32 per share on shares which were valued at roughly $55.00. The dividend was 61.7 percent of the profit, so that even the shareholders were being screwed.

David

Towards the end of his article (in the fifth-last paragraph), Mirko Bagaric says:

"... Hundreds of thousands of Australians
on the Newstart allowance are forced to endure
life on $234 a week (about $100 a week less
than the pension); ..."

Poster 'miacat', whom I would infer from previous posts on OLO might have familiarity with various rates of welfare payments, on Wednesday, 9 March 2011 at 1:57:19 PM, posts a quoted recitation of this statement.




The parenthetical "(about $100 a week less than the pension)" is not correct.




The age pension is paid fortnightly. A friend on the full pension recently showed me a current Centrelink payment statement for the age pension: the rate of payment was shown as being, in total, $539.80 per fortnight. This rate equates to $269.90 per week. Assuming the quote of $234 per week for Newstart allowance to be correct, the difference between Newstart and the age pension is $35.90 per week, not the $100 quoted.

Perhaps there is some pension supplement, like, for example, rent assistance, upon which the quoted comparison has been made, but if this is so, surely it should be stated.

The author also says:

"[The banks] are nearly essential institutions,
having permeated the life of every adult Australian.
Most financial transactions – even welfare payments
– now involve the banks, giving banks unprecedented
capacity to charge fees, charges and interest on our
money."

In this connection it is interesting to note the claims recently made elsewhere on OLO as to the charging of ATM fees of up to $10 PER TRANSACTION for the use of ATMs in some remote communities. Doubtless it will be claimed that such 'remote community ATMs' are not owned or operated by the banks in general, or more specifically the CBA, but given the requirement that welfare payments must be deposited into (predominantly CBA) bank accounts, isn't it time that this 'nice little earner' ripping off the welfare system for the profit of private operators should be relegated to history?

This privileged position should not be allowed to distort welfare payment levels.