Friday, July 30, 2004

How to Reform The Banks

Mark Latham says if he's elected he'll do something about the banks Good - it's long overdue.

Before moving to Australia almost ten years ago, I lived and worked in several European countries and the USA, and have held bank accounts in most of them, but until I came to Australia I was not charged fees for running a cheque account for many years.

In fact, in the UK, far from charging me to have a bank accounts, all the major banks pay me interest. Neither has any US or European bank ever charged me to run a cheque account.

In the rest of the civilized world, banks are content with the profit they make by the sophisticated management of the money they hold – and there is nothing to prevent Australian banks doing the same except greed.

It’s about time Australian banks dropped their 19th century business model and came into the 20th century: I do appreciate that for the time being the 21st might be a bit of a stretch. And if they whine that can’t manage it, perhaps opening the Australian banking market to some genuine free competition would do the trick.

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