Iceland Beats the Bankers and Leads the World
New Zealand has not suffered the extreme banking collapses that occurred in the US but we still had to endure the demise of some financial institutions at great cost to the taxpayer (South Canterbury Finance cost us more to put right than all the Treaty settlements combined). Our four biggest banks remain stable and are returning solid profits, however their success is costing us dearly through unnecessary bank charges, tax avoidance and the loss of dividends to Australia. We even have a group of lawyers currently suing banks for excessive default fees which have been estimated as costing us $1 billion over the past six years.
Banks seem to be held in the same regard as churches, powerful institutions that supposedly exist to serve the people and as such are above criticism. However, as has been found with the Catholic Church, behind the impressive and noble facade are some self-serving individuals who are more intent on meeting their own needs than those they should be serving. The salaries of the New Zealand CEOs of the four main Australian banks exceeded $15 million last year.
I happened to sit beside a manager within New Zealand's Co-operative Bank on a recent flight and she admitted that she could earn far more for doing the same job in one of the Australian owned banks. However, she told me that she would rather provide a real service and meet the genuine needs of customers than suck people dry by pushing products that only serve the bank's interests.
The Green Party has pushed for stronger regulatory controls and the need to shift to a locally owned bank for our government banking (currently through Westpac). The way our banks are operating and dictating much of our financial activity, especially in supporting inflated property prices, has helped contribute to our shocking private debt and our dismal Current Account deficit.
Although we haven't reached the desperate levels of Iceland we are heading to a similar place with all the financial power and privilege being controlled by a few. While I don't envisage taking the same course of action that the Icelandic people committed to, I do see a need to reclaim the control of our financial systems and banking. The fact that Iceland took the dramatic step of nationalising their banks, and refusing to pay for the mistakes of a corrupt few, is a valuable example of what is possible. While Iceland is now quietly enjoying economic growth, Greece and New Zealand are being told that privatisation and tighter belts is the only way.
It is time to reject the power of the banks and reclaim the power for ourselves!