The Senate has launched an enquiry into the breakup of the banks. You can learn more on it here: http://cecaust.com.au/releases/2019_02_18_Submission.html
Here is my submission. Please add your voice to protect our bank deposits.
I would like to address the desirability of separating the deposit/lending activities of banks from the investment/insurance/advice activities.
I consider it mind-bogglingly unconscionable that parliamentatrians elected to represent the people should have allowed the possiblility of depositor’s funds to be stolen to support the investment activities of a commercial bank.
That the IMF should be promoting this misuse of depositor’s funds is completely wrong.
Separating the investment and deposit taking activities of the banks is the sanest guarantee that those deposits will not be used without the consent or permission of the depositors.
A corporation is by nature a risk taking venture and the rewards and losses of that venture belong primarily to the shareholders, secondarily to debenture holders. Not the depositors. Not the government. Not the public. The shareholders. Period. Anything else is a perversion of the construct of a corporation.
Providing the banks have securities against which they lend the depositor’s funds there is no honest reason at all the depositor’s funds need be placed at risk.
Depositors partake of neither risk nor reward in the investment activities of a commercial bank. No depositor I know of asks to see the commercial portfolio of a bank prior to making a deposit. That risk was not part of the explicit or implicit contract the depositor effected with the bank on depositing his funds.
The risk should lie where it naturally falls, with the alternative of reward, at the shareholder’s feet. And depositor’s funds should be completely removed from that arena.
Failure to do so is an irresponsible act of gross negligence towards depositors.
Thank you for your time.
Tom Grimshaw