Last week, it became evident that many Australians know very little about money.
Most of the media headlines were about the federal budget and screaming complaints from couples earning over $150,000 per year because they are being considered ‘wealthy’. Then another money based social phenomena caught my attention; for some very strange reason, Australians love to get upset when their banks announce they’re making a profit.
Call it pessimism, cynicism, or just straight up tally poppy syndrome, Australians love to publicise their hatred for the finance sector in an act of – as I am now calling it – bank bashing. Bank bashing has reached record volumes, with the latest moans and groans coming as all the big four banks made profit announcements in the last fortnight, all earning over $1 billion profit in the last quarter alone.
Many people believe that the only individuals to benefit from a healthy financial system are white collared, shiny cuff link wearing, cigar puffing investment bankers. Whilst the investment bankers do earn themselves a nice wage, all Australian individuals and businesses benefit from a strong banking sector, and we shouldn’t be complaining about their success.
Last weekend, global financial markets panicked (again) as Greece (again), announced they are in a somewhat terrifying economic mess (again). Ireland is still reeling from the global financial crisis, the US is still shaky and for a while there, it was becoming a possibility that the nation of Iceland would no longer exist. Yet many of us Aussies believe that having financially successful banks is a bad thing?
Next time you feel like bank bashing, consider the next three things.
Strong and stable banks help make a strong and stable country.
The Australian dream has long been to own your home and I ask the bank bashers, would it be easier to get a home loan here in Australia, or abroad in Europe?
Both Greek and Irish banks and governments are struggling to repay their EU bail out loans and if they are ever repaid then they’ll have to start paying back their own creditor which doesn’t leave much left for the young, newly married couple looking to get their own pad on a quarter acre block.
A strong finance industry helps other industries grow, and is imperative to increase standard of living.
Without a strong finance industry, we couldn’t fund the mining industry. Without a strong mining industry, we couldn’t capitalise of the rise of China. Without China buying our resources, we would not have avoided the global financial crisis.
If you can’t beat them, join them.
I often ponder about bank bashers, wondering if they have ever read the boring pamphlet that their superannuation fund sends them every year. I think they’d be pleasantly surprised to read that they own shares in the big four banks via their retirement plans.
Bank bashing is like a rocking chair, it will keep you occupied but it will leave you exactly where you started. Under the principle of, if you can’t beat them, join them; why not buy shares in the big four banks? They are all publically listed and for less than $25, so when you hear of the banks next big profit you can take your dividends and laugh all the way to the … bank.
It’s cheaper and easier than ever to be a bank customer.
The bank bashers like to tell themselves that the banks are evil, and out to sting you whenever they can. But now more than ever, those tired old lines are wearing thin as competition between the big four banks is heating up. Banks are going back to traditions, rather than relying on pre GFC trading profits; they are trying hard to sell loans and services to businesses and individuals. This recently rekindled competition is forcing everyday banking fees down, or removing them altogether.
We hear horror stories, we complain if Internet banking is down for an hour or two, but if we are honest with ourselves, even the most scrupulous bank bashers can see the banks have lifted their game.
We can transfer money via iPhone apps, get approved for loans over the phone and purchase shares online ourselves without giving a stockbroker profitable and effortless commissions.
So, with all things considered, is bank bashing really justified?
Hardly.
