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Key’s Cynical Pre-emptive Banking Strike

Key’s Cynical Pre-emptive Banking Strike

John Key’s call for stricter regulations for banks is a cynical and carefully planned pre-emptive strike on behalf of the ANZ and other banks ahead of the release of a report from the Financial Markets Authority and Reserve Bank next week.

As ANZ’s New Zealand chairman and a member of the Australian ANZ board he hopes to be able to argue that “all is well, we have already put in place measures that will address the issues the Australian Royal Commission and this inquiry has raised”, and, as he has already attempted to portray “NZ banks don’t operate the same as the Australian banks”.

But if there isn’t a problem, then why call for stricter regulations?

The strategy is designed to try and avoid a more detailed investigation into banks operating in New Zealand, and deflect attention from the enormous two thousand million profit that ANZ has made in the last year.

97% of that profit, over $400 for every person in the country, was pulled out of New Zealand and shipped off to ANZ’s overseas owners, depleting our economy of much needed capital.

Most of the profit was made by the bank lending money it doesn’t have and then charging interest on those loans.

The idea that banks lend out money people deposit with them is a myth, a fact confirmed by the 1955 Royal Commission on Money and Banking in New Zealand.

Bernard Hickey put it succinctly recently – “They invent money out of nothing whenever they lend. The only thing stopping them from going completely berserk is central banks force them to keep some of their capital aside whenever they make a loan. So that's the dirty little secret of international finance.”

Social Credit would make banks keep a much larger percentage of their capital on deposit with the central bank (Reserve Bank) which would restrict their debt creating activities and reduce their profit.

The Reserve Bank would tasked with replacing that private bank lending with funds for the government and local bodies to invest in health, education, housing, and infrastructure projects, and for low interest loans for first home buyers, saving taxpayers, ratepayers and first home buyers enormous sums of interest.

We would also provide Kiwibank with the capacity to reduce its interest rates and its fees, which would introduce some real home grown competition for the big four Aussie banks.

Ends

© Scoop Media

 
 
 
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