Australian bank tries to explain supply and demand -- to much criticism
Their "wickedness" was to raise mortgage interest rates by less than one half of one percent
"Prime Minister Kevin Rudd has chastised Westpac for sending an email to customers justifying its recent interest rate rise by comparing the bank to a business selling banana smoothies.
In the email, the bank likens itself to businesses selling banana smoothies after storms have decimated banana plantations and forced the price of the fruit to rise dramatically. "In some ways a bank is really just like a company that sells banana smoothies. A bank is a business that buys and sells something ... only in this case that something is money," the company says in a video attachment to the email.
The bank said its decision to increase rates by 45 basis points, well above the 25 point rise delivered by the Reserve Bank last week, was vital to its business. However, Mr Rudd said the company was dealing in matters that affected peoples' lives. "I think Westpac should have a long, hard look at itself," Mr Rudd told ABC Radio in Townsville. "[They are] talking about peoples' most basic things in life - a mortgage, an affordable mortgage, to underpin things as basic as a home."
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4 comments:
"[They are] talking about peoples' most basic things in life - a mortgage, an affordable mortgage, to underpin things as basic as a home."
If these things are so basic, why isn't the government required to provide them, along with Police, Fire, and National Defense?
Oh, wait, that's right, socialism only works with OTHER people's money....
In the real world, companies that do not perform well, go under. They must. They should. It is the natural order of things, and trying to change that natural order (by handouts and bailouts) gives us the massive financial mess we now have.
I completely agree with the bank. People lose sight of the fact that a bank is a business, and businesses exist to make money for their owners/shareholders. In the case of banks, they do so by helping other people manage their assets... but that is a means, not an end.
I think people understand that banking is a business, but they don't like being patronised and having what they consider to be legitimate concerns simply dismissed.
I think it was porrly handled by WBC but that's the way it goes - hopefully people change banks if they feel strongly enough about it.
The problem, of course, is the break fees.
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