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Finance

DIZZY: Bank spin makes customers sick

merchantbanker “The Banks are bastards” was the blockbuster headline that was once appeared on the cover of the Bulletin magazine.

BANKS VITAL YET HATED
Banks are the arteries of the modern economy.

Nothing cemented Paul Keating’s place in public life more than his extensive deregulation of the then over-regulated banking and finance markets in Australia. It freed up the provision of finance to Australian consumers like never before. That sounded good but the move ensured we have more debt for things like home-loans, personal loans, car leases, expensive finance for the latest plasma screen.

We’ve grown much more comfortable with debt, it’s been easier to access, it’s become an increasingly big part of the lives of most Australians.

Banks are now more important than ever, partly because of that. Despite their centrality, we still hate them.

We hate the fact they closed branches, centralised decision-making, put bank managers out of reach and tried to shove even the most unwilling customers online.

We hate their unreasonable monthly account fees.

Some banks are addressing those issues, but too few and too late.

BANK BASHING GOOD SPORT
Because of that bashing banks in good politics. We’re going to see more bank regulation, particularly on areas like fees. The British government has got very tough on bank fees and we suspect Rudd won’t be far behind once the global financial crisis is seen as fully resolved.

At the top end of town too, the banks do themselves no favours. Investment banks have earned themselves a filthy reputation the last few years. They are rightly or wrongly blamed for the global financial crisis.

This terrible reputation wasn’t enhanced on the weekend when the head of Goldman Sachs – maybe the best managed merchant bank in the world – declared that their work was “God’s work”. It was enough to remind us of the brilliant “God complex” line from the film Malice.

CHEAP SHOT
A mere throwaway line in a long interview given by the firm’s CEO Lloyd Blankfein to the Sunday Times in London. It was glossed over by the journalist who wrote a reasonably positive and friendly long piece but the headline writer nailed it, running the quote in the headline next to a big pic of goofily grinning bank boss wannabe billionaire.

The story then exploded, in newspapers all over the world and across the blogosphere.

The reaction clearly shows not many think Goldman Sachs or anyone else in Wall Street is engaged in a holy pursuit. Quite the reverse in some cases. After the global financial crisis, their reputation is at an all-time low, unrivalled since the bank collapses of the 1930s that terrified the Depression Generation.

It will be a long road back for the banks.

Made longer by one of the smartest guys in the room being a PR dumb-ass.

Discussion

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  1. They’re terrible bastards. Sold us up in ’91 and I was never the same…

    Posted by The other Kroger | November 10, 2009, 8:43
  2. John Symons sniffing around a state seat. Better Premier than O’Farrell…

    Posted by I'll save you | November 10, 2009, 8:45
  3. Posted by Three Blind Mice | November 10, 2009, 10:22
  4. Posted by Nick Shambles. | November 10, 2009, 11:11
  5. Thank Christ for deregulation, now alongisde economic freedoms my political freedom will allow me and my stupid mates to bring in a human rights charter so I can finally marry another fundamentalist neo liberal

    Posted by David Barrow | November 10, 2009, 12:34
  6. All the majors are fee hungry bastards especially the Collecting Wealth Bank, who guarantee a fee with every transaction.

    Posted by Argus Tuft | November 10, 2009, 13:21
  7. “….the head of Goldman Sachs – declared that their work was “God’s work”. ”

    No cheap shot that one – it’s a declaration of profound faith.

    By a sheer miracle – as the US financial system teetered on the brink of systematic collapse, the Goldies found themselves in the enviable situation whereby numerous ex-Goldman alumni were holding the levers of power and preservation in the corridors of government.

    As a result, the Goldies have sailed through the GFC relatively unscathed.

    Unfortunately for a number of their former peers on Wall St, the manna from Treasury heaven did not fall on too many other tribes on the Street.

    Meaning not only did the Goldies survive, but with a lot less competition remaining – they are prospering mightily !

    see:

    http://www.rollingstone.com/politics/story/28816321/inside_the_great_american_bubble_machine

    What else would a man-of-faith like Mr Blankfein put this remarkable turn of events down to other than devine validation ?!

    Posted by True Believer | November 10, 2009, 14:19
  8. I can vouch for the fact that “Merchant Bankers” are WANKERS – even more so than my dear old Dad Andrew.

    Posted by Annie | November 11, 2009, 19:48