Interact
Member access
Follow
Browse
SuperInvestor TV
» Articles - Urgent Changes Required to the Finance System
Urgent Changes Required to the Finance System
Shortly after the beginning of time, the finance system played an important role in economic development. It is through the collection of deposits, providing business and personal loans, and trade finance that local and international commerce developed. Brokerage businesses developed to satisfy the requirements of the investors by buying and selling shares on the client’s behalf. How far away are we today from the finance system servicing consumers, commerce, manufacturing and international trade? How did it happen that it became a means to itself? For example, the finance system of today is totally blurred by some of its activities:
- With the advent of computers the banks now charge their clients for every move they make with their money for example, processing fees, late fees, insufficient funds fees, service fees and the list goes on. This has occurred because it is now easy for the banks to insert additional lines of code to charge a myriad of fees and only deal with exception when the client complains or as is happening in Australia there will be class action taking the banks to court for re-funding on all the overcharges that have been made. The consumers will win, the banks know and some are already beginning to re-fund to their long suffering clients.
- Recently the financial institutions through their various subsidiaries offer the services of a broker, adviser, lender, deposit taker, etc. Worse still is that the regulatory environment has allowed and encouraged to participate in these conflict of interest infested activities.
- Worse still is that these same financial institutions have been allowed to participate as a position taker and hedge funds operations. All of this, with predominantly depositors money. Where is APRA and ASIC and the plethora of Banking Law and corporate law is violated on a daily basis? Why are the institutions and individuals allowed to continue to operate and reap havoc on the economy?
At long last the regulators are looking to making some changes. The US Wall Street will soon be contending with a potentially powerful consumer protection agency and banks will be forced to wall off, or even sell off, some of their most profitable divisions. How long will this take and will it succeed in winning against a powerful lobby of the financial institutions? For the sake of international financial stability, this needs to happen this year in 2010.
The world needs financial systems that encourages savings, business growth, international trade. When were you last at a bank looking for a business loan to be told that your Bank does not have any funds allocated to your sector? What is the sector that they are financing where they don’t have funding for a legitimate and viable business that is helping with the nation’s GDP?
Vas Banschikov
www.SuperInvestor.com.au
Now that you have read this, what do you think? Do you have other ideas? Please share you views with other members (eg by blog or discussion form) and/or request professional member(s) to contact you directly.
