“Australian banks are upset. Their
$30 billion per year gravy train of profits from the Australian people is
finally being slowed down.
A levy on bank liabilities of 0.06% annually was announced as
part of the 2017 Federal government budget, and is expected to raise about $1.5
billion per year, or 5% of bank profits.
To be clear, the banking system is a regulated cartel. Its primary function is to provide a public good in the form of the money supply of the country. As such, we would expect it to be uncompetitive, and use tight regulatory controls to ensure that the privileged position of private banks is not being abused.
In my book, Game of Mates, I explain that the result of this uncompetitiveness and lack of adequate regulation in Australia is that over half of the banks' profits can be considered economic rents, which could be taken back with better regulation and shared with the public at large.”
Read
the full article on Cameron Murray’s blog.
To be clear, the banking system is a regulated cartel. Its primary function is to provide a public good in the form of the money supply of the country. As such, we would expect it to be uncompetitive, and use tight regulatory controls to ensure that the privileged position of private banks is not being abused.
In my book, Game of Mates, I explain that the result of this uncompetitiveness and lack of adequate regulation in Australia is that over half of the banks' profits can be considered economic rents, which could be taken back with better regulation and shared with the public at large.”
I’m student of BBA and studied banking & finance as subject, now I’m thinking about to choose it as specialized subjects. My personal interest is in banking, which is allowing me to go through it. Thanks for sharing such an informative post. Keep it up.
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