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Revolution in bank sector; The moment that we have all been waiting for
Topic Started: 17 Jul 2017, 09:13 AM (1,792 Views)
Bardon
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This will be a huge milestone passed in the mother of all booms unfolding.

Revolution in bank sector

A MAJOR step in revolutionising Australia’s personal banking system is being signalled by the federal government today.

Treasurer Scott Morrison has announced reforms that would allow credit unions and building societies to call themselves banks.

He said better home loan deals would result — a prospect that will resonate with the thousands of Australians who step out every weekend in the hope of buying their dream home.

The planned reforms, to be put to parliament later this year, will lessen — or at the very least challenge — the power of the big four banks.

It is hoped that the removal of restrictions on which lenders can call themselves banks will increase competition and provide more choice for borrowers.

A major step in revolutionising Australia’s personal banking system is being signalled by the federal government today.
“Allowing more lenders to be called banks will mean better access to cheaper loans and more generous deposit rates for Australians,” Mr Morrison said.

The reforms, flagged in this year’s Budget, will permit as many as 60 credit unions and building societies to call themselves banks.

At present, only those institutions with capital of more than $50 million can use the “bank” title.

Australia’s strong banking sector has been the bedrock of our national economy for decades, and their power is significant.

The Big Four recorded a combined $15.4 billion in profit during the last reported financial year.

About four in five Australian households have a mortgage with one of the quartet. But by comparison with some countries, such the United Kingdom, Australia’s banking market has not evolved as much as it could have, into a more diverse marketplace.

The aim is to encourage new players into the market and give credit unions and building societies more freedom to improve their offerings to customers.

Certainly, for many young people, walking into a bank branch is a foreign experience.

Younger bankers, and indeed many cyber-savvy account holders, conduct all their banking and pay their bills online.

Using “pay tap” or “pay wave” technology to pay for their macchiatos at their neighbourhood cafe has become commonplace.

Indeed, the concept of digital, branch-free banking could become the norm in coming years.

Already, ING Direct has positioned itself as a branch-free bank, saying it can offer better deals by running a leaner operation without paying for costly bricks-and-mortar branches in prime real estate locations.

Of course, any measure of financial revolution has to come with regulation and safeguards for the consumer.

The Australian Prudential Regulation Authority has a serious role to play in this case. It will have the final say in whether a new player can actually brand itself as a “bank”.

Also, all deposits with registered lenders will be protected by the government’s financial claims scheme guarantee.

The changes, if properly controlled, should be welcomed by all Australians seeking better
value from their bank.

http://www.heraldsun.com.au/news/opinion/revolution-in-bank-sector/news-story/aeb05c9da5eaf777b3842665bd42036c
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Tyson
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Seems like a great time to have a home loan.
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Ex BP Golly
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Is this the government trying to keep investor confidence high in Australia's financial sector by extending its guarantees to anyone that flogs a mortgage?
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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herbie
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Ex BP Golly
17 Jul 2017, 02:19 PM
Is this the government trying to keep investor confidence high in Australia's financial sector by extending its guarantees to anyone that flogs a mortgage?
Gov 'n tha RBA plus wotever other mobs has got any say in it will just pretty much 'die in a ditch' before they lets any really bad things happens ta their precious Sydvegas/Melvegas housin' prices Golly - That's just life in this nation at this time. (Oh 'n for tha foreseeable future for mine.)
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Swine
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Ex BP Golly
17 Jul 2017, 02:19 PM
Is this the government trying to keep investor confidence high in Australia's financial sector by extending its guarantees to anyone that flogs a mortgage?
and so they should.

i saw on tv the other day that property industry is our biggest contribution to jobs from what i recall

its important to keep the wheels of business in motion and keep australia strong

i'm all for it

onward and upward

Cheers
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Bardon
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Ex BP Golly
17 Jul 2017, 02:19 PM
Is this the government trying to keep investor confidence high in Australia's financial sector by extending its guarantees to anyone that flogs a mortgage?
No it will mean that Step 2 is complete and Step 3 in the cycle is emerging.

Quote:
 
This is how it will unfold.

1. We are now past the point where the banks and their balance sheets are now fixed.

2. Credit issuance is expanding and land prices are on the increase.

3. New methods of bypassing the previous round of supposed regulatory fixes to prevent another credit surge are invented by highly paid brains for hire that seem perfectly rational to the market.

4. Loosening credit standards appear in the marketplace and land prices continue to increase.

5. Consumers aggressively bid up even higher the price of land to new astronomically high levels.

6. Consumers become concerned about values and decide to stop bidding up land prices any higher.

7. The market stalls as far as pricing and transaction volumes are concerned.

8. Credit issuance contracts.

9. Shit hits the fan.

10. New rules to lending are made to prevent the shit hitting the fan again.

11. Back to Step 1.


http://australianpropertyforum.com/single/?p=8607079&t=10417865

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Rufus
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I wonder if these new 'banks' can create money as real banks do, or will they lend out depositors balances.
Take risks - if you win you will become wealthy, if you lose you will become wise
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zaph
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Rufus
17 Jul 2017, 07:59 PM
I wonder if these new 'banks' can create money as real banks do, or will they lend out depositors balances.
If you think old banks create money then why can't new banks?
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Rufus
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zaph
17 Jul 2017, 08:04 PM
If you think old banks create money then why can't new banks?
They may not be full banks, just banks in name only.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Ex BP Golly
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Swine
17 Jul 2017, 04:09 PM
and so they should.

i saw on tv the other day that property industry is our biggest contribution to jobs from what i recall

its important to keep the wheels of business in motion and keep australia strong

i'm all for it

onward and upward

Cheers
Just like in Ireland before it popped.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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