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Master Geek
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  Reply # 784926 21-Mar-2013 12:57
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Blah blah banks blah blah the banking system is just a big scam anyway. Don't y'all think there is something inherently effed up about a system where you have to pay for three houses just to live in one?


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  Reply # 784927 21-Mar-2013 13:05
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Remember that guy who set fire to a car in Cuba St?

This happening is pretty much what he was worried about.




Twitter: ajobbins


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  Reply # 784933 21-Mar-2013 13:17
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For those who think that tax payers shouldn't guarantee NZers back deposits. The government wants people to save and the safest place to keep you money is the bank. There is no easy way for your average back customer to judge how safe a bank is. Heck when many of the previously perceived banks failed in the gfc many of the experts didn't have a clue. Even those banks with top credit ratings.
Also why do almost every other countries government in the world guarantee back deposits. Bank deposits aren't an investment, it is supposed to be a safer place to store money than in a piggy bank in your house.
A government guarantee often doesn't cost the tac payer anything anyway, as it is more just perceived safety and the previous guarantee didn't cost anything due to no banks failing. The cost was due to finance companies, which was a mistake by the government for allowing them to be covered . The government says that insurance will cost to much but they haven't provided costings, plus if someone has substantial assets they would be mad not to insure them. Why would savings be any different..?

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Master Geek
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  Reply # 784943 21-Mar-2013 13:24
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mattwnz: For those who think that tax payers shouldn't guarantee NZers back deposits. The government wants people to save and the safest place to keep you money is the bank. There is no easy way for your average back customer to judge how safe a bank is. Heck when many of the previously perceived banks failed in the gfc many of the experts didn't have a clue. Even those banks with top credit ratings.
Also why do almost every other countries government in the world guarantee back deposits. Bank deposits aren't an investment, it is supposed to be a safer place to store money than in a piggy bank in your house.
A government guarantee often doesn't cost the tac payer anything anyway, as it is more just perceived safety and the previous guarantee didn't cost anything due to no banks failing. The cost was due to finance companies, which was a mistake by the government for allowing them to be covered . The government says that insurance will cost to much but they haven't provided costings, plus if someone has substantial assets they would be mad not to insure them. Why would savings be any different..?


You've said it in one... If someone has substantial assets they would be mad not to insure them. In that case, the bank (or investor) should seek out their own insurance privately. It isn't the Government's role to underwrite banks (or finance companies, or mining companies, or railways, or airlines for that matter...)

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  Reply # 784955 21-Mar-2013 13:42
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DaveDog:
BlueShift:
Byrned:
DaveDog: I cannot fathom why anyone has a problem with this. You invest money and there is a risk. Simple as that. I'm a taxpayer - why should I carry the risk for someone else's investment?


Completley agree with this. Any investment (especially one with a return) carries risk. Risk can often be defined by the amount of return. 


So an account with 0% interest, that you also pay account fees on should be negative risk?


Not at all. The account may pay no interest - but you are receiving services in lieu of interest anyway.


So the account fee is a top-up because the interest i'm not getting doesn't cover the value of the service provided. I think sock-under-the-mattress time might be approaching.

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  Reply # 784959 21-Mar-2013 13:44
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But can people buy insurance for bank deposits privately easily ? I doubt it. This is why some compulsory insurance is needed across all banks and the depositors then pay. But as all nzers/taxpayers have a bank account anyway this is no different from it being insured centrally by the government. We have ACC and a public health system which many people never use but all taxpayers pay for it as it is a insurance for something that may occurs in the future and bank deposits are no different. The difference is though that a government guarantee on bank deposits may not cost the taxpayer a cent of nzs banks are so safe. But I am concerned about the lending many are doing at the moment on overpriced houses.

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Master Geek
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  Reply # 784963 21-Mar-2013 13:53
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mattwnz: But can people buy insurance for bank deposits privately easily ? I doubt it. This is why some compulsory insurance is needed across all banks and the depositors then pay. But as all nzers/taxpayers have a bank account anyway this is no different from it being insured centrally by the government. We have ACC and a public health system which many people never use but all taxpayers pay for it as it is a insurance for something that may occurs in the future and bank deposits are no different. The difference is though that a government guarantee on bank deposits may not cost the taxpayer a cent of nzs banks are so safe. But I am concerned about the lending many are doing at the moment on overpriced houses.


Government Guarantees in banking will only lead to more irresponsible lending and reckless investing. The banks need to be responsible for their own insurance and it could easily be legislated for. Guaranting the banks can only in the long run lead to ruin for us as a nation. Don't get me started on ACC... That's a whole new thread. But - ACC is state run. Public health is state run. Banks - are not.

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  Reply # 784989 21-Mar-2013 14:16
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DaveDog:
Kyanar:
DaveDog: I cannot fathom why anyone has a problem with this. You invest money and there is a risk. Simple as that. I'm a taxpayer - why should I carry the risk for someone else's investment?


My transaction account is not an "investment".  It returns ZERO interest to me.  Why should I be on the hook for the bank's investments?


Because as a depositor, you make a conscious decision to use that particular banks services - As soon as your money hits your account... Interest or not - You're an investor. It's your responsibility to check out their potential status and weigh up the risk...


No, this is patently ridiculous.  These days, it is literally mandatory to have a bank account.  You cannot not have one.  You cannot make a conscious decision to not accept any risk and not use any bank's services.  And if the government forces people to take risks (try dealing with the IRD without a bank account, or try to get a job without one), it has to be prepared to back people against the risks that it has itself forced upon people.

What you're effectively defending is the financial equivalent of a wartime draft.

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  Reply # 784991 21-Mar-2013 14:23
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Risky lending hasn't proven to be the case on Australia where, nor in NZ for the 3 or so years when we did have a guarantee in place. Possibily the opposite in fact.

Kiwibank is arguably state owned, and we do have the reserve bank which is state run, and is there to police banks so they lend responsibly. So it shouldn't be any differently if there was compulsory insurance.Also the insurers would demand responsible lending and that banks kept a certain amount of cash in reserve under some ratio. Government bonds are one option available to NZers which should be safer than bank deposits, as I believe that is guaranteed by all tax papers. So overseas companies buying bonds in NZ would get bailed out by taxpayers. Yet  NZers banking in foreign owned banks in NZ don't. That doesn't seem right to me.

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Master Geek
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  Reply # 784992 21-Mar-2013 14:23
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Kyanar:
DaveDog:
Kyanar:
DaveDog: I cannot fathom why anyone has a problem with this. You invest money and there is a risk. Simple as that. I'm a taxpayer - why should I carry the risk for someone else's investment?


My transaction account is not an "investment".  It returns ZERO interest to me.  Why should I be on the hook for the bank's investments?


Because as a depositor, you make a conscious decision to use that particular banks services - As soon as your money hits your account... Interest or not - You're an investor. It's your responsibility to check out their potential status and weigh up the risk...


No, this is patently ridiculous.  These days, it is literally mandatory to have a bank account.  You cannot not have one.  You cannot make a conscious decision to not accept any risk and not use any bank's services.  And if the government forces people to take risks (try dealing with the IRD without a bank account, or try to get a job without one), it has to be prepared to back people against the risks that it has itself forced upon people.

What you're effectively defending is the financial equivalent of a wartime draft.


Yes - It would be very difficult to not have a bank account. However, You (as a depositor) can minimise your risk by diversifying and by controlling the amount of funds you keep in the bank. It is however, not my responsibility as a taxpayer to underwrite your deposits.

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  Reply # 785002 21-Mar-2013 14:37
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DaveDog: Yes - It would be very difficult to not have a bank account. However, You (as a depositor) can minimise your risk by diversifying and by controlling the amount of funds you keep in the bank. It is however, not my responsibility as a taxpayer to underwrite your deposits.


That's tripe and you know it.  "Diversifying"?  "Controlling the amount of funds you keep in the bank"?  These things simply are not possible to the average person.  The average person has maybe $300-$500 hit their bank account once a week, and it disappears within two days on bills and expenses.  In this employment environment, a good chunk of these average people receive said money from the Ministry of Social Development (i.e. the Government) in the first place.  "Diversifying" this is impossible.

Also, I think you need to remember that the people you're talking to in this forum are also taxpayers.  You're not part of some special class of individual - we're part of the same voting class too.

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  Reply # 785072 21-Mar-2013 16:14
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DaveDog:
Yes - It would be very difficult to not have a bank account. However, You (as a depositor) can minimise your risk by diversifying and by controlling the amount of funds you keep in the bank. It is however, not my responsibility as a taxpayer to underwrite your deposits.


And that is exactly my point. You can minimize by diversifying, but what do people diversify into? Property. And this is why NZ property market is so over valued. Sharemarket is too, and both of those are far higher risk. Bank is the lowest possibly risk, and is basically just a safe place to store cash, so people can't physically steal it from you. Otherwise people may as well just spend it, or keep it in their own safe. I would prefer to give my money away than let a bank take some of it.

It is all probably irrelevant anyway, because when a major bank fails, the government will very likely bail it out anyway. It has happened in the past when we didn't have any guarantee scheme. The likelyhood of a bank in NZ failing in the next 50 years is very high, as BNZ only failed 20 years ago, and had to be bailed out by taxpayers. Also when labour get back in eventually they plan to introduce a guarantee., which should make it easier anyway, as Australia have a guarantee scheme, and NZs banks are mainly all Australian anyway. It would just bring us back in line with them, as it doesn't make sense that their NZ customers are treated worse than their Australian customers. They ere also discussing this all on Radio NZ today and discussed these exactly points.

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  Reply # 785119 21-Mar-2013 17:42
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Diversify into bitcoin, and precious metals, doesn't seem practical does it..

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  Reply # 785121 21-Mar-2013 17:46
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Dairyxox: Diversify into bitcoin, and precious metals, doesn't seem practical does it..


It isn't an investment though. It is used as a way to protect capital in the event of a financial meltdown, as happened a few years ago.

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Master Geek
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  Reply # 785123 21-Mar-2013 17:54
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mattwnz:
DaveDog:
Yes - It would be very difficult to not have a bank account. However, You (as a depositor) can minimise your risk by diversifying and by controlling the amount of funds you keep in the bank. It is however, not my responsibility as a taxpayer to underwrite your deposits.


And that is exactly my point. You can minimize by diversifying, but what do people diversify into? Property. And this is why NZ property market is so over valued. Sharemarket is too, and both of those are far higher risk. Bank is the lowest possibly risk, and is basically just a safe place to store cash, so people can't physically steal it from you. Otherwise people may as well just spend it, or keep it in their own safe. I would prefer to give my money away than let a bank take some of it.

It is all probably irrelevant anyway, because when a major bank fails, the government will very likely bail it out anyway. It has happened in the past when we didn't have any guarantee scheme. The likelyhood of a bank in NZ failing in the next 50 years is very high, as BNZ only failed 20 years ago, and had to be bailed out by taxpayers. Also when labour get back in eventually they plan to introduce a guarantee., which should make it easier anyway, as Australia have a guarantee scheme, and NZs banks are mainly all Australian anyway. It would just bring us back in line with them, as it doesn't make sense that their NZ customers are treated worse than their Australian customers. They ere also discussing this all on Radio NZ today and discussed these exactly points.


It's not rocket science. There is more than one bank and its unlikely they'd all fail simultaneously. Spread the funds across several of the trading banks.

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