Bad Banks Exposure of ASB - 12noon, Friday 11 December

ASB ain’t no “Kiwi bank”, protest their •interest gouging •profit taking •tax dodging •union bashing •and for turfing people out of their homes.

12noon, Friday 11 December

Outside ASB Bank,

cnr Queen St and Wellesley St,

Auckland Central.

You will have noticed that the Big Four Aussie-owned banks have been trying to suck up to us lately. BNZ closed their doors for a day so staff could do community work. And ASB, well, they're trying to convince us that they’re a "Kiwi bank". But as John Minto said in his article for the Christchurch Press: "What a brazen lie – like hell it’s a kiwi bank". Because ASB is 100% owned by the Commonwealth Bank of Australia, one of the world's biggest banks.

Why are the banks trying to cuddle up to us? Because ANZ National, BNZ, Westpac and ASB Bank know there's a bad mood rising against them. And it's well deserved, here's a few reasons why people hate the banks:

• Despite the recession they’re continuing to make mega-profits by interest gouging grassroots Kiwis.
• They’re inflicting high fees and penalties on low and middle income people.
• They’re forcing mortgagee sales in increasing numbers.
• They’re hiring teams of lawyers to try and get out of paying $2.25 billion of unpaid tax.
• And in the case of ASB, they’ve used anti-union practices to drive Finsec, the bank workers union, out of ASB branches.

At 12noon on Friday 11 December we’re planning an “exposure” of ASB Bank. We’ll be handing out a leaflet that draws attention to ASB falsely claiming to be a “Kiwi bank”, as well as exposing the other bad things ASB and the rest of the Australian banks are up to.

To download a flyer advertising the action, click here.

Please come along to support this action. Bring your own placards and your grassroots voices. We’ll be inviting the media along, so the more people the better.

Hope to see you there.

Vaughan Gunson
Bad Banks publicity coordinator
svpl@xtra.co.nz
021-0415 082

Are New Zealand's major banks sound?

by Grant Morgan

International credit rating agency Standard & Poor says that all Australian banks have "insufficient funds to cover their lending exposures", reports the Sydney Morning Herald on 25 November 2009.

No Australian banks were included in the handful that Standard & Poor believe meet the minimum threshold to be considered safe for depositors.

Given that Australian banks own all major New Zealand banks, this news is hugely significant for the Bad Banks campaign in Aotearoa.

The Standard & Poor analysis points towards the financial unsoundness of Australian-owned banks in New Zealand. See Australian banks fail new capital test.

Australian banks fail new capital test

by Eric Johnston
Sydney Morning Herald
25 November 2009

RATINGS agency Standard & Poor's has warned that nearly all the world's big banks - including Australia's major lenders - have insufficient funds to cover their lending exposures and risk a ratings downgrade unless they move to bolster their balance sheets over the next 18 months.

The warning follows the release of a tougher global measure of bank capital by Standard & Poor's, which has found that most large banks do not meet the minimum 8 per cent threshold under the credit ratings agency's new risk-adjusted capital ratio.

The findings appear to be out of step with claims by Australian banks that they are among the strongest in the world under the traditional measure of bank capital known as the tier 1 ratio.

Over the past year, Australian banks have raised more than $20 billion in new capital to strengthen their balance sheets. This has resulted in an increase in the average tier 1 ratio of the big four banks to 8.9 per cent from 7.8 per cent a year ago.

But critics warn that these measures of tier 1 can be misleading because they fail to distinguish between higher-risk and lower-risk forms of lending. As well, the tier 1 measure is not consistently calculated on an international level.

Australian banks argue that their capital ratios would increase by about 2 per cent on average if they were calculated under existing British rules.

Under the new measure, S&P gives a lower rating to hybrid capital because it behaves more like debt than equity. For Australian banks, hybrid securities can make up to a quarter of their total capital. Specific exposures including trading desks and private equity would require banks to significantly increase the level of capital.

S&P reviewed 45 banks around the world under its new risk-adjusted measure. No Australian banks were included in the handful that hit the minimum threshold to be considered safe.

Of three local lenders included in the review, ANZ scored the highest rating with 7.1 per cent. National Australia Bank was at 6.9 per cent and Commonwealth Bank at 6.3 per cent.

While Australian banks benefited from having a large exposure to low-risk residential mortgages, S&P said a narrow geographic and business base counted as a negative. It also noted that the capital raisings by the local banks had been used mainly to fund acquisitions or balance sheet growth.

Among the global banks considered most vulnerable are Mizuho Financial (2 per cent), Citigroup (2.1), UBS (2.2) and Sumitomo Mitsui (3.5). The global average came in at 6.7 per cent.

''The results to date appear to confirm our view that capital is a rating weakness for a majority of banks in our sample,'' S&P said.

The ratings agency said it expected banks to continue strengthening their capital ratios over the next 18 months to comply with tougher regulatory standards. ''Failure to achieve this could put renewed pressure on ratings,'' it said.

The top-rated global bank is HSBC on 9.2 per cent, followed by Dexia on 9 per cent and ING on 8.9 per cent.

The review of capital strength comes as Australian banks face a crackdown on rules related to liquidity.

Like hell it's a kiwi bank

by John Minto
from stuff.co.nz
12 November 2009

The other night when I went out to get an ice-cream at a local dairy I was gobsmacked to be confronted with a wall of huge yellow advertising posters with heavy black lettering – “We’ve been a KIWI BANK since 1847” with the ASB logo at the bottom. What a brazen lie – like hell it’s a kiwi bank.

Back in the 1980s when it was a respected trustee bank, owned by its New Zealand account holders and serving their interests, it could legitimately make the claim. But in 1989 it was privatised and like our other big three banks – ANZ National, BNZ and Westpac – it’s owned by Australians.

And with the shift to private shareholder ownership the ASB’s first priority has changed to delivering dividends to its shareholders rather than service to its customers. No wonder the big four banks score so lowly in customer satisfaction surveys. The only thing keeping them going is the huge hassle and extra expense involved in changing banks. Without customer inertia these banks would be run out of town.

It’s no surprise to find yesterda'ys release of the multi-party Parliamentary Banking Inquiry’s report confirms the big banks did not pass on the full effect of reductions in the Official Cash Rate to New Zealanders in recent times. More billions into the banker’s coffers.

They have all been guilty of various customer and taxpayer rorts and have acted more like a cartel than competing businesses.

It’s not just the exorbitant fees and unjustified charges for all sorts of normal customer services but they have actively targeted their customers to go further into debt and have put a lot of pressure on bank employees to sell more debt to indebted customers.

They openly mocked Finance Minister Michael Cullen’s attempts to reduce lending for investment properties and will continue to undermine any government initiative which gets in the way of increasing their profits.

In most years these banks have taken $2 billion in profit across the ditch and we wonder why our current account deficit is so high.

And then there are the tax evasion cases where the High Court has found the banks guilty of screwing taxpayers through structured financial transactions which have been described as a sham to avoid tax.

The ASB owes us $280 million while the others (Westpac $961 million, ANZ National $562 million, BNZ $661 million) are even worse. It’s an appalling abuse - together these banks owe $500 in unpaid tax for every person living in New Zealand.

With such well-deserved bad publicity the banks are going on a charm offensive. As well as the ASB bank’s attempt to resurrect a nostalgic kiwi connection from its arrogant abuse of customers and taxpayers, the misnamed BNZ announced last week it was “Closed – for good” If only.

Most of the bank staff were out doing work in the community for a day to show what a good corporate citizen the bank is. The BNZ PR machine was working well because our local suburban newspaper (and I’m sure this was repeated throughout the country) had a story showing bank staff working hard clearing land for a garden for the families of cancer sufferers here in Auckland.

“Banks just genuinely believe that we need to be part of the community” said BNZ head of external communications Diana Maxwell.

She says the BNZ accepts there has been a loss of customer trust in the big banks “and we need to work hard to rebuild that trust”. They could start by paying back the $661 million they owe and apologising for their bad behaviour.

The latest charm offensive is just company spin. Former BNZ boss and now chief executive of BNZ parent bank, the National Australia Bank says the current hostility towards the major Australian banks is not tenable for viable businesses.

That’s the reason for the charm offensive – nothing to do with any genuine belief about needing to be part of the community.

Our economy has lots of parasites feeding on the wealth created by others. The ASB and its Aussie mates are the biggest bludgers.

I’m pleased these banks are having a harder time and I hope their spending of millions to buy kiwi goodwill is a failure.

Bad Banks leaflet #4: The Rich Have Stolen the Economy

Bad Banks leaflet #4 is out now. It's been produced to use at stalls outside cinemas showing Michael Moore's new film, Capitalism: A Love Story, which has general release throughout the country.

The leaflet aims to connect with some of the issues raised in the film, in particular the massive government bailouts of the world's biggest banks, but it also points towards a more fundamental crisis of the system. On the back page of the leaflet is Grant Morgan's short-essay, 'Senior investment guru forecasts longrun damage to capitalism's profits'.

At the same time as we provide a "big picture" analysis of the global economic crisis and it's fallout, we need to be looking at what immediate demands the Bad Banks campaign can raise. This leaflet promotes a Financial Transaction Tax (FTT) to net the big banks and other financial speculators. A small percentage tax on financial transactions would easily make up for tax revenue lost as a result of removing GST tax off food, a demand made popular last year by RAM-Residents Action Movement (http://www.ram.org.nz/).

While the leaflet is intended to connect with people attending Michael Moore's new film, it can still be used on other Bad Banks stalls in combination with the leaflets already produced. If you would like bulk copies printed and sent to you, email Len office@sworker.pl.net.

Banks know there's a bad mood rising

The Big Four Australian-owned banks know that the public mood is against them, because, well, they're interest gouging, profit-taking, tax dodgers - there's not much to like!

But they're trying to do the impossible and suck up to us anyway. See the NZ Herald article below, 'Banks: your new best friend'. In the article, the BNZ's person in charge of media spin, Dianne Maxwell, says "Banks just genuinely believe that we need to be a part of the community". That's a hard sell when you've just been caught avoiding $661 million of tax.

This clumsy attempt at sucking up to us could seriously backfire. Most people will see it for what it is, and if we can highlight the banks' deception, perhaps we can turn the mood even more sour against them. And in doing so we can seek to achieve a higher public profile for pro-grassroots policy demands like removing GST off food and introducing a Financial Transaction Tax instead, which would force the banks and other "fat cat" financial speculators to pay a greater share of the tax burden than they do now.

Banks: your new best friend

by Adam Bennett
from NZ Herald
7 November 2009

You may have noticed the big Australian-owned banks trying to cuddle up to you lately.

In one television commercial a big clumsy Westpac guy, prompted by wordless admonitions from a bunch of everyday Kiwis, eventually does the right thing by going to some inconvenience to retrieve his discarded icecream wrapper from the sea.

ASB Bank, on the other hand, is trying to convince people it is one of us, running adverts telling us it has been a "Kiwi bank" since 1847.

Continue

Free public transport instead of bailouts for the banks

Rather than bailing out the banks with trillions of dollars of public money, which governments in Europe and North America have been doing, ecosocialists in Britain are calling for "environmentally friendly job creation" and "a massively expanded public transport system that is fully integrated, publicly owned and free".

£40bn more to be added to banking bail-out ‘fiddle’

from Socialist Resistance
3 November 2009

Today, it has been announced that another £40 billion is to go into the Lloyds/HBOS & RBS Bank bail-outs. Alastair Darling says it represents a “better deal for the taxpayer”. But “better deal for the taxpayer” than what?

The reality in fact is that best deal for the tax payer would be the complete nationalisation of all these banks without compensation, this since without the state’s intervention they’d all already be bankrupt and likely have dragged down the entire UK banking system with them. This would have made most shares and not only those of the Banks completely worthless.

Given the Government stepped in precisely to avoid the latter, and indeed to avoid the possible collapse of the entire Capitalist system as a whole, surely the very least a due diligent, astute and businessman-like ‘taxpayer’ should have expected is for ‘the state’ to have picked up these bankrupt businesses lock stock and barrel for absolutely nothing - especially given the unknown liabilities being taken on. That’s usually what happens in the real ‘free market’ world, and in some cases with criminal/civil proceedings being taken out against those responsible for the bankruptcy.

However, instead of taking over these banks entirely as it did with Northern Rock, the Government decided instead to allow these banks’ shareholders to keep their shares, giving them a financial value they wouldn’t otherwise possess. In so doing the Government effectively unnecessarily transferred many £billions of ‘taxpayers’ money directly to the value of the share portfolios of those banks’ current and former investors.

Furthermore, if the Government’s plans work out and the share-value of these banks rise and the banks themselves can be re-floated (i.e. re-privatised) the biggest beneficiary won’t be so much the taxpayer who has effectively taken on all of these banks’ entire liabilities and the ‘risks’ associated with them (and will likely continue to do so), but their existing private shareholders i.e the very same people who had they invested in other sectors of the economy would have lost their shirts and have nothing to show for their investment whatsoever!

The part nationalisation of Lloyds/HBOS/RBS is one humongous fiddle that needs exposing. It’s not the nationalisation part that’s wrong but that the state has decided to reward the shareholders of these otherwise bankrupt banks with anything (i.e. a part share in a nationalised bank) and is currently directing huge resources to their re-privatisation.

Also, if state intervention including nationalisation is right for the banks (and/or under certain circumstances) why not other sectors of the economy in other circumstances? And if such huge sums of money can be found almost at a drop of a hat to ’sort out the banks’ (the £40 billion injection today just further shores up existing investors, will not create any new jobs, but rather is to be accompanied with staff cuts) why not much smaller amounts for environmentally ‘friendly’, job creation and economically more reflationary measures such as a massively expanded public transport system that is fully integrated, publicly owned and free to everyone at the point of use, such as is being advocated by the Campaign for Free Public Transport?

Along with the complete nationalisation of Lloyds/HBOS/RBS without compensation, free and better public transport and many other similar ideas would be much ‘better value’ to the taxpayer, whatever they cost, than the £40bn being used to re-capitalise these otherwise ‘bankrupt’ banks today, and the ultimate purpose of which as already indicated, is to nothing other than to assist in their future re-privatisation.

We really should be making the bankers and bank shareholders pay for the financial shit we’re in rather than rewarding them! Plus if we can find the money to bail-out and re-capitalise the banks, which we wouldn’t actually need if we owned them outright, then that should be being used to defend existing jobs and to create new ones and/or avoiding us ordinary folk having to pay for it.

US protest against the banksters

by Mary Bottari
from PR Watch.org
26 October 2009

With the newspapers full of talk about “zombie” banks and parasitic “vampire squid” financial institutions, it was particularly fitting that the “Showdown in Chicago” started with a ghoulish group of zombies rocking out to Michael Jackson's “Thriller.” Chicago's own South Shore Drill Team opened the three days of banks protests with a bang and had the crowd of thousands of activists dancing in no time.

The Showdown promises to be the first major American protest against the banks since the financial meltdown in September 2008. Thousands are expected to join three days of educational activities and the large march on Tuesday to the American Bankers Association (ABA) convention at the downtown Sheraton hotel.

The Reverend Eugene Barnes of the Central Illinois Organizing Project opened the evening’s festivities, stating:

“Welcome to the Showdown in Chicago, we have come together to reclaim America and hold Wall Street accountable. Imagine a story as terrible as this, the same financial institutions that created the crisis, sent the economy into a tailspin, handed out bonuses on top of bonuses, and needed hundreds of billions of dollars of taxpayers money, are back in business as usual. They are spending millions on Capitol Hill trying to defeat legislation that would help ordinary people and strengthen our economy. Each of us has traveled here to Chicago today because we will not stand what is being done to our families and communities. If we needed confirmation that we are all in this together, the financial crisis caused by Wall Street is living proof. Everyone has been impacted by the greed of the big banks. Bank-owned properties are littering our communities, rising unemployment, sky-high credit card interest rates, payday loans at 1,000% interest, and not to mention billions of dollars in lost pensions. It is a sad fact when you are 65 years old and you realize you have to go back to work. We have come here in Chicago because we are sick and tired of being sick and tired, but we are also here because we have hope because we know America can do better. It is time to put people first.”

Here is a smattering of the speakers who followed:

* Tom Balanoff, the President of Service Employees International Union (SEIU) Illinois, noted that not a single person in this room caused the economic crisis. He reminded the crowd that it was appropriate that they were are starting this movement for reform of the financial system in the same city where the push for an eight-hour workday began and spread around the globe, referring to the 1886 Haymarket massacre.

* U.S. Senator Dick Durbin of Illinois demonstrated that he was in touch by showing up and telling harrowing tales of hard-working constituents who had been scammed by adjustable rate mortgage firms. Even though the Senate failed to pass legislation that would have allowed judges the discretion to modify mortgages to help keep people in their homes, Senator Durbin said he had not giving up the fight. He also hinted that he working on some new approaches, including an idea that would allow families whose homes have been foreclosed on to rent their own homes from the banks, keeping them off the streets and keeping the homes occupied and cared for. He noted, “We are working on this idea, and it would be helpful if one bank would step up to the idea.”

* And, the audience heard from regular folks as well: people caught in the payday loan trap, like Mitzi Rivers-Singleton of Witchita, Kansas, who finally worked her way our of crippling debt with the help of a credit union and a local community group. She said, “I stand with you toe to toe up against big banks. I want to let the know that enough is enough, so I tell my friends and family you don't go there. You have other options.”

But this was the warm up act. After the welcoming comments, the activists took to the streets. Carrying signs featuring Dorothea Lange’s famous photo of a Depression Era mom with her two children. The activists marched through the streets to the Sheraton where the ABA was meeting, chanting: “ABA, you’re the worst! It’s time to put people first!” And, “Bailout? No, thanks! Bust up big banks!” And, “Enough is enough!” Huge posters portraying Jamie Dimon of JPMorgan and Citigroup’s Vikram Pandit were part of the crowd.

The rambunctious, but peaceful, crowd gathered outside the hotel, quickly attracting a large police presence. At least seven luxurious limousines pulled up in front of the Sheraton, but their parties seemed reluctant to appear and face the crowd. Soon a large group of well-dressed people exited the Sheraton chanting. At first, this reporter was confused. Could this be the bankers rushing their own limos? But when I recognized Hugh Espey of Iowa Citizens for Community Improvement, it became clear that these were protestors, too. They were chanting: “We’ll be back!” Later, “We laid low in the building all day until we simultaneously converged on the lobby and burst into changes. It was all very quiet and then all of a sudden it was very loud,” Espey said with a grin on his face.

Aretha Franklin was a theme of the evening as a singer performed “Think” at the Showdown conference, and one activist sang “Shame, shame, shame on you,” to the tune of her song “Chain of Fools” in front of the Sheraton. Oddly enough, none of the Banksters seemed to share the sentiment.

The protestors attempted to deliver a letter to ABA President Edward Yingling listing their concerns and demands, but no representative of the ABA would come out to accept the letter, guaranteeing that the protestors would try again later.

See also moves in Britain to break up big banks, go to Government to break up the banks.