Australia’s Banking System May Be The “Bloody Big Butterfly” Which Triggers Next “Financial Storm”
By: GoldCore
GoldSeek.com
Wednesday, 12 September 2018
by Nick Hubble of Capital & Conflict
We’re edging ever closer to the financial crisis I’ve been investigating since 2012. I moved to four different cities in Australia to conduct my research, interviewing mortgage brokers and former bankers over four years.
Over the last few months, a Royal Commission has exposed what my research did back then. But the campaigner who first exposed the issue going back to the early 2000s continues to discover even more extraordinary facts.
Between the three of us, the conclusion is clear: Australia’s banking system is about to blow, potentially triggering serious disruption in financial markets. Including here in Britain.
Let’s take a look at some of what the Royal Commission has found first.
Major financial service providers have stolen about a billion Australian dollars from customers through “fee for no service” deals. They charged people for services they never received, such as regular analysis of their financial position. One bank, formerly Australia’s central bank, even charged dead people a fee for no service. Having discovered the problem, the banks sat on it for two years.
A bank which provided commissions to anyone who introduced new borrowers to them was caught giving a tailor $488,000 for his help in securing $122 million in home loans.
In what could be the biggest class action in history, five million Australians are lining up to sue their pension funds, which are often owned by the banks. Instead of investing their customers’ savings in the highest interest offering products, the banks just held on to the cash in their own accounts. Because of the long periods of time during which pension funds hold savings, even small differences in interest rates add up to huge lost returns per person.
Funnily enough, the UK government is busily implementing the same sort of pension system under its opt-out rules…
During the Royal Commission hearings, a witness admitted to having lost count how often his firm had mislead the regulator.
All this should amount to some impressive fines and lawsuits in coming years.
But the biggest issue goes much deeper.
Australia’s version of the sub-prime crisis
The Rest…HERE
