Originally published in The Canberra Times on April 28, 2012

Wouldn’t it be nice to decide how much you were worth? And wouldn’t it be even better to be able to force people to give you the money you think you deserve? Of course it would, but then again, we can’t all behave like the big four banks. In most industries when customers buy less of your product your profits begin to decline. But not, it seems, in banking. In banking, the bankers tell us, if the rate of growth in borrowing begins to decline then the profit margin on their existing loans simply needs to rise. Otherwise their profit growth would slow, and we obviously couldn’t have that. In most industries, if your competitors start a price war with you then your profits will begin to decline. But again, the bankers would beg to differ. If credit unions and building societies push up the interest rates on fixed-term deposits then the banks will simply have to increase their mortgage rates. Otherwise, profit growth would slow, and we obviously couldn’t have that.

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