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Thread: Black Monday

  1. #5401
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    Quote Originally Posted by Aaron View Post

    Most bank depositors would be using it as a place to store money and make transactions they would be hardly classified as investors as blackcap classifies them. Gosh they may not even know their own banks credit rating.

    .
    I do not care. If you are putting your money with a 3rd party it is incumbent on you to do due diligence. No such thing as a free lunch. Having a govt guarantee is not equitable. Why only for banks? Why not on stocks? Or property? Or any other asset class? Anything outside your weekly wage $2,000 or so should not be guaranteed in my opinion.

    They are not using banks as a place to store money anyway. They are using banks to get a return on investment. If banks offered 0% return then anyone would be nuts putting their money in the bank. It would be safer in a fire proof deposit box in a vault or such like.
    Last edited by blackcap; 16-04-2019 at 05:05 PM.

  2. #5402
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    Quote Originally Posted by blackcap View Post
    I do not care. If you are putting your money with a 3rd party it is incumbent on you to do due diligence. No such thing as a free lunch. Having a govt guarantee is not equitable. Why only for banks? Why not on stocks? Or property? Or any other asset class? Anything outside your weekly wage $2,000 or so should not be guaranteed in my opinion.

    They are not using banks as a place to store money anyway. They are using banks to get a return on investment. If banks offered 0% return then anyone would be nuts putting their money in the bank. It would be safer in a fire proof deposit box in a vault or such like.
    Incumbent on me to do Due diligence??? I suspect even Phd economists don't fully understand all the risks in our new financialised world. If you know what might cause the next crisis and when it will occur or what the future holds please tell me I would be most appreciative as I obviously lack your intellect and foresight.

    I agree a govt guarantee for the banks is not equitable and we don't have one, do we? I thought that is why they brought in the Open Bank Resolution to dispel the notion depositors have a taxpayer guarantee for their deposits. We don't even have depositors insurance as many countries do.


    A return on investment?? anyone with money in a savings account is in theory losing at a .25% interest rate that means with a 1.9% inflation rate they are losing 1.65% per annum and as we know anything worth saving for, such as a house or shares is rising at a rate much faster than the CPI. To anyone starting out without support the chance of upward mobility looks pretty bleak in the current world, no wonder people are getting angry.

    I digress. The issue was what I think of no guarantees for bank depositors I agree with blackcap I don't think a govt guarantee for banks is fair but wonder how depositors insurance works in other countries.
    Last edited by Aaron; 16-04-2019 at 06:30 PM. Reason: punctuation

  3. #5403
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    Quote Originally Posted by Aaron View Post
    Incumbent on me to do Due diligence??? I suspect even Phd economists don't fully understand all the risks in our new financialised world. If you know what might cause the next crisis and when it will occur or what the future holds please tell me I would be most appreciative as I obviously lack your intellect and foresight.

    .
    So you just buy stocks without doing any research or anything? Just like the name and park it there?

    Anyway you don't need to do any due diligence with banks. That is the whole reason for the transparency and reporting requirements. So everyone can have a good look and you would hope the experts would pick up if banks were transgressing too far or if things were getting a bit dodgy.

    Yes there is a return on investment. The one that just preserves your capital and ensures inflation does not erode it. What if banks gave you 0% on your deposits. Would you put money in the bank then? Off course not, it would be safer in a fire proof safe.
    Last edited by blackcap; 16-04-2019 at 08:31 PM.

  4. #5404
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    Most people are dumb. Most people don't have time or knowledge to be able to work out whether a bank is safe. The general public need to be looked after, as is the purpose of a government. Bank regulation is required.

    Finally, banks don't give a return on money, after tax they barely cover the inflation. Bank is not an investment. It's a company that offers services in exchange for using your money to invest for itself. A pretty good deal for all involved, really. But as banks are required, they have a monopolistic hilt, so again, another reason for regulation. Additionally, they can put economies at risk. One more reason to regulate. Of course over regulation reduces profits and increases customers costs or opportunity cost.

  5. #5405
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    the banks are really starting there scare campaign about the proposed new capital requirements

    The Reserve Bank seems to hope the impact would be on bank shareholders, but acknowledges banks could reduce lending or push up prices.
    https://www.stuff.co.nz/business/112...r-with-farmers

    I dont believe for a minute the banks will stop lending ( kiwibank could lend more lol steal there market share) , there s/h will be up in arms about reduced divs , anyway guess its all part of there game to get the RB to back down and if they do we will have the status quo no protections for depositers in nz when the current global party comes to an end.

    bull

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