Comments on: Interest rates http://massiveaction.tv/blog/interest-rates-3 Dean's daily blog on all things pertaining to life and investing Tue, 13 Dec 2011 21:46:02 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Dean Letfus http://massiveaction.tv/blog/interest-rates-3/comment-page-1#comment-346 Dean Letfus Fri, 03 Apr 2009 01:06:31 +0000 http://massiveaction.tv/blog/?p=695#comment-346 Well I think we enter different territory then Monkeyboy as that becomes price fixing by a cartel effectively which is another issue completely. However the fact is that many industries have unofficial pricing agreements to remain profitable. We only hate it with banks because they affect every kiwi. Being more like Aussie would help, much more competition and variety of product. Well I think we enter different territory then Monkeyboy as that becomes price fixing by a cartel effectively which is another issue completely.

However the fact is that many industries have unofficial pricing agreements to remain profitable. We only hate it with banks because they affect every kiwi.

Being more like Aussie would help, much more competition and variety of product.

]]> By: Monkeyboy http://massiveaction.tv/blog/interest-rates-3/comment-page-1#comment-345 Monkeyboy Thu, 02 Apr 2009 21:32:34 +0000 http://massiveaction.tv/blog/?p=695#comment-345 I totally agree Dean. I would even add that it is actually a constitutional and legal responsibility that the banks have to make as much as they can. However it is a also a banks responsibility to ensure a stable financial market especially in a financial crisis. This is especially so of the big 4 banks. This is also different from other Commercial Businesses. Does it not seem that they are profiteering from this crisis when last year they were only making 0.10% on some of their lending yet now they are making 0.75%. Why, when they have hedged their bets so effectively have no risk. I would also add that it is because we only have 4 major players in NZ that while I don't advocate that banks conspire together to give us our rates, I do believe they don't have an effective watchdog to stop the anti-competitive nature. The Govt offered the banks a lifeline to enable them to borrow money easier through a guarantee. This was not designed so that the banks could then start making more profit. It was designed to keep the banking system afloat. Tell me Dean, what would you say if one bank put their rates up by another 1% (and it doesn't cost anymore for the banks to get the money) and within a couple of days the other banks followed. Would your response be the same. I totally agree Dean. I would even add that it is actually a constitutional and legal responsibility that the banks have to make as much as they can.
However it is a also a banks responsibility to ensure a stable financial market especially in a financial crisis. This is especially so of the big 4 banks. This is also different from other Commercial Businesses.
Does it not seem that they are profiteering from this crisis when last year they were only making 0.10% on some of their lending yet now they are making 0.75%. Why, when they have hedged their bets so effectively have no risk.
I would also add that it is because we only have 4 major players in NZ that while I don’t advocate that banks conspire together to give us our rates, I do believe they don’t have an effective watchdog to stop the anti-competitive nature.
The Govt offered the banks a lifeline to enable them to borrow money easier through a guarantee. This was not designed so that the banks could then start making more profit. It was designed to keep the banking system afloat.
Tell me Dean, what would you say if one bank put their rates up by another 1% (and it doesn’t cost anymore for the banks to get the money) and within a couple of days the other banks followed. Would your response be the same.

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