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The Gov't is considering spending megabucks on "studies" to tell it why Bank profits are so high

This blog is comedic. Newshub report that "Banks are back under the microscope as the Government faces mounting pressure to investigate their eyewatering profits. The PM has confirmed a market study is being currently considered". The Reserve Bank said banking should be a focus for a market study similar to what occurred for supermarkets.


I'd like to ride the consulting gravy train so will offer my assistance to help answer the PM's question. My fee is ten bucks. Here's the answer to why bank profits are high: Adrian Orr.


It works like this: the past month our private banks have held $53.97 billion in their cheque accounts at the Reserve Bank (which calls them "settlement accounts"). Where did it come from? The Governor's Quantitative Easing (money printing) program. He claims those who say QE caused losses are making "noise" over an "accounting" entry.


Well, I will let you in on a secret - the interest rate on those settlement balances is now 4.75% (the Official Cash Rate). That's $2.6 billion per annum. Meanwhile the trading banks are paying you 0% on your Cheque a/c (whilst getting 4.8% on theirs). It's a $2.6 billion annual wealth transfer from the public to the banks. Enough to rebuild Gisborne.


Easy money if you can get it. Unfortunately you need a banking license from the government to be in on the scam.


Sources:

https://www.newshub.co.nz/home/politics/2023/03/banks-act-s-david-seymour-hits-out-at-chl-e-swarbrick-s-windfall-tax-on-banks-proposal.html




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