This is a good news story, as I discuss with progress being made on the move towards the creation of a Postal Bank in Australia, with Robbie Barwick from the Australian Citizens Party.
But we need to keep the pressure on to ensure that the National Bank is developed in the way to benefit ordinary Australians and Businesses, so there is more still to do. And keeping pressure on our elected representatives will be essential!
This is an edited version of a live discussion with Robbie Barwick from the Australian Citizens Party, as we explore the current status of the war on cash, regional banking, post offices, and the need to revolutionize the financial system for ordinary people.
A new report from the Finance Industry Peak Body, UK Finance, which represents more than 300 firms in the UK, reveals that cash remained the second most popular payment method, after debit cards – with an estimated three million people still relying on it. Their research suggests 1.5 million mainly used cash in 2023, up from 900,000 the previous year.
This was it appears an unexpected jump in the number of people who mainly use notes and coins for their daily spending, despite all the propaganda that the UK moving closer to becoming a cashless society. A UK Finance spokesperson said it would monitor the situation regarding people who mainly used cash to see if this was the start of a trend or merely a “statistical blip”. We think it’s more than that.
As I highlighted in a recent post the chaos caused by the global IT outage last week underlines the risk of moving towards a cashless society. Even if the data forecasts that cash will represent only 6% of payments in a decade’s time, it’s critical if other systems go down, as we saw with the outage last week” UK Finance said. This is as close to the Swedish message of make sue you keep cash on hand in case of emergencies as it gets, without saying it!
In Australia, as I reported recently there was also a rise in cash usage, despite the banks best worst efforts, and the recommendation from the recent Senate Inquiry into Regional Branch closures also recommend making access to cash an essential service.
Its simple really people, keep using cash, and we retain a backup in case of emergency. We also know people using cash regularly has a better handle on their finances, teaches kids the real value of money, and acts as an antidote to tap tap credit based society, where banks make a dollar from every transaction, which costs us all. While the war on cash is far from over, use it, or lose it. Its that simple!
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Digital Finance Analytics (DFA) Blog
Cash Transaction Usage On The Rise (Despite The Banks’ Best Worse Efforts)!
This is an edited version of live discussion, with Professor Steve Keen.
Steve Keen is an Australian economist and author, highly critical of neoclassical economics as inconsistent, unscientific, and empirically unsupported. Mainstream economist have in effect damaged society and the planet because of what they don’t know!. There are better ways to think about what’s going on. His latest book The New Economics.
This is an edited version of a live discussion, with Robbie Barwick, Research Director from the Australian Citizens Party as we discuss the newly released Senate report on Regional Branch Closures. Following their recommendations for making the provision of banking services and access to cash a fundamental right, and for considering a Public Bank, where does the fight go next, and will the Politicians play games or do what’s right for the Australian community?
Over the 13 hearings held across Australia and in more than 600 written submissions the only defence of the banks’ actions came from the banks themselves, but when their executives appeared to give evidence, all they managed to do was convince the senators of just how out of touch they were with their customer heartland.
This arrogance was perfectly summed up by expert witness Andy Schmulow, Associate Professor of Law from the University of Wollongong.
“When it comes to closing branches, Australia is a free for all in which banks are entirely unconstrained: there is no degree to which they are held to account in discharging their obligations to communities which have supported them for generations. This, it is respectfully submitted, is disgraceful and indefensible,” Dr Schmulow said.
The senators agreed. On Friday they handed down an historic report with eight bold recommendations.
But now lets see the actions to protect regional communities and access to cash. I want to see real action now, not just political games, so I will be watching closely.
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Digital Finance Analytics (DFA) Blog
Bankers Lose Over Bank Branch Closures: But Now The Political Games Begin!
Contrary to the bankers claiming digital payments are replacing cash, yet more evidence is showing that use of cash is on the RISE! We look at data from New Zealand based on a recent survey as the Reserve Bank there announces pilots to make access to cash easier.
The trend of rising cash use was in fact confirmed recently by the RBA too, though their surveys are just not up to the New Zealand standard, and of course using cash more is also rising in the UK.
Not only is the ongoing use of cash a human right, a protection of freedom, and cheaper than other payment means, but it is also proving to assist households with their budgetting. Do not believe the bankers’ BS…
RBNZ Short: Why Access To Cash Is Essential For Social Cohesion Short: https://youtube.com/shorts/d32BqMmfwUc
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Digital Finance Analytics (DFA) Blog
Don’t Believe The Bankers: More People Are Using Cash!
This is an edited version of a live discussion, with Robbie Barwick from the Australian Citizens Party as we look at the latest in the war on cash, and the current claims we are in a “pre-war” environment more generally. What, or who is driving the narrative and what does this say about our economic and social freedoms, and the way politics is played?
Against the backcloth of higher rates for longer, many of the Australian banks will provide trading updates over the next couple of weeks. As a group, they currently have the highest set of valuations seen for decades, but then, their earnings have held up relative to expectations. So what is ahead? And are all banks equal?
Some analysts are saying that although banks have flat to negative growth coming up for this year, from a capital management perspective, they’ve all got excess capital, so there will be more buybacks and special dividends to come. So the high valuations are just fine. But not everyone is convinced. Citi’s downgrades come a month after Macquarie told its clients to “underweight everything” in the banking sector.
But it’s worth highlighting that not all banks are created equal, because regional banks including Bendigo and Adelaide Bank, and Bank of Queensland are under the pump and look to be dying a slow death because of higher cost of funds compared with the big four banks, higher capital requirements, the upward pressure on costs from upgrading technology and lack of scale.
Treasury, the RBA and APRA need to ask themselves whether they are happy to ultimately have a financial services sector dominated by the big four banks and Macquarie. This is why a public bank, providing essential banking services to communities should be part of the solution, something which we hope will be tabled in the final report from the Senate looking in Regional Branch closures. As major banks leave smaller population centres without services, we need a valid alternative. We will discuss this again on Tuesdays live show at 8pm Sydney with Robbie Barwick.
Meantime, the larger players continue to buttress their profits, at the expense of ordinary Australians, and while the market like the high valuations, Australia INC is the poorer.
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Banking is a game of confidence, in that if fears of a potential bank collapse arise, then naturally people who hold money at that institution will try to grab their cash, and run. The Global Financial Crisis, where many banks were saved by the use of public funds.
But this means taxpayers are on the hook, and so post the GFC, there were attempts to develop alternatives which would transfer risks from the tax-payers to other parties, including shareholders bond holders and even depositors of an affected bank. The so called bank resolution – or living will – includes the deposit bail-in regimes which were proposed (initially by merchant bankers by the way) and adopted by the G20 to allow deposits held at banks to be grabbed and converted to equity. This happened of course in Greece a few years later.
In the IMF Global Stability Report from October 2023, there was a section which highlighted that the March 2023 bank runs in Switzerland and the United States were unusually large and fast with their speed and size facilitated by rapid online deposit withdrawals and the rapid spread of worries among important groups of depositors via social media and other digital channels.
I am often asked if bail-in is a real risk to savers, and my reply remains the same. It’s a theoretical risk for sure, thanks to the likes of the IMF and others, but practically, its unlikely to be activated because the collateral damage would be enormous. But understand that those bankers who dreamed up bail-in and the QANGO’s who are pushing it, are still pushing Governments to give the financial regulators ever more power, never mind democracy. Its a cautionary tale of who is actually calling the shots, and the risks to democracy are real.
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