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Citizens Electoral Council of Australia

Media Release Thursday, 16 March 2017

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

Don’t procrastinate—for the sake of Australians’ economic security, break up the Big Four banks now!

Not before time, the Australian Labor Party has indicated a royal commission on banking could lead to the break-up of the Big Four banks. ALP frontbencher Matt Thistlethwaite explained to Peter van Onselen on Sky News on 14 March that Labor was looking at separating retail and investment banking, referring to the US law that Bill Clinton repealed in 1999, called the Glass-Steagall Act.

“Is it possible that Labor might look at legislation to break up the banks?” van Onselen asked. “Yeah”, Thistlethwaite said. “There’s a whole host of people who argue that we should break up the retail banking sections, so deposits and mortgages, from the wealth management, the insurance that they’ve added on over recent years, and it’s an approach that was taken in the US, it was watered down unfortunately by Bill Clinton [who in 1999 repealed Glass-Steagall]. It’s something that they’re doing in the UK and there’s calls for it to happen in Australia….”

There sure are calls for it to happen in Australia—mainly from the Citizens Electoral Council, which has campaigned tirelessly for this policy since the 2008 crash.

Thistlethwaite is expressing a shift in ALP policy. In a public meeting in Geelong in April 2016, Thistlethwaite’s leader Bill Shorten answered a question on Glass-Steagall by saying: “Sometimes this question gets asked by the Citizens Electoral Council. … We’re not going to introduce the Glass-Steagall law.”

What’s changed? Political reality, that’s what, driven by economic reality.

Since Shorten brushed off Glass-Steagall as a CEC idea, the issue went on to dominate the US presidential election. After eight years of Barack Obama personally blocking the policy on behalf of Wall Street, Bernie Sanders’ championship of Glass-Steagall took him to within a hair’s breadth of winning the Democratic Party nomination. The Wall Street-owned Democratic Party establishment had to rig the primaries to stop him, but nevertheless Sanders succeeded in getting the policy included in the party’s platform.

On the Republican side, Donald Trump personally ensured his party adopted Glass-Steagall in its platform, and he campaigned for a 21st century Glass-Steagall. His spokesman Sean Spicer has twice reiterated Trump’s support for the policy.

Both Sanders and Trump were political outsiders who attracted enormous support from voters who were economically on their knees, but rose up against the Establishment politicians whose policies of free trade and deregulation had impoverished millions, but profited Wall Street.

Similar voter revolts, driven by economic reality, have occurred all over the world: for instance, in the support for both Jeremy Corbyn and Brexit in the UK, and in December’s Italian referendum.

It is also occurring in Australia. Recent elections have either been landslides, as voters have punished governments for their economic pain and/or for pushing discredited policies like privatisation; or they have been virtually hung parliaments, as voters have expressed equal disgust at both sides; and, for the same reason, they have featured record minor-party votes.

It makes sense that Labor is responding to this new political reality. The question is, are they also responding to the reality of the looming economic crisis?

The Australian property bubble is stretched to burst, which will crash Australia’s entire banking system when it happens. Today’s interest rate rise by the US Federal Reserve, which has flagged more, is a bad omen for heavily indebted Australian homebuyers, who will get smashed if such rate rises sweep the world.

The Big Four banks have gone on a derivatives gambling binge. Their exposure to dangerous derivatives bets are increasing by as much as a trillions dollars a year each, and two of the Big Four, CBA and NAB—incidentally the two biggest gamblers—are now hiding their true exposure.

(Click here to see a CEC graph showing the explosion in derivatives gambling and the deceptiveness of CBA and NAB: any depositor in those banks should call their banker and demand to know why.)

Internationally, numerous economic authorities, including the IMF and Bank for International Settlements, are warning that we are headed for another financial crisis worse than 2008.

Labor is hedging its bets by predicating the need to break up the banks on a royal commission, which would be just as likely to oppose Glass-Steagall. A royal commission can be rigged in numerous ways, including by the scope of its terms of reference, and by the personnel appointed to conduct the investigation. Then-Treasurer Joe Hockey picked ex-CBA boss David Murray to head his 2014 Financial System Inquiry, and predictably it recommended against Glass-Steagall. By his own words Thistlethwaite acknowledged the soundness of separating banking—there is no need for a royal commission to confirm it. Any procrastination puts the economic and financial security of Australians at grave risk.

The CEC’s mobilisation for Glass-Steagall has forced the politicians to debate it; now is the time to join the fight, to push it into law!

Click here to sign the petition: Break up the big banks now—pass Glass-Steagall!

(If you’ve already signed the change.org petition, click here to sign the physical petition that the CEC will table in Parliament.)

Click here for a free copy of the CEC’s pamphlet Glass-Steagall Now!, which explains the dangers lurking in Australia’s banking system and housing bubble that only a full Glass-Steagall separation can fix.

Click here to join the CEC as a member.

Click here to refer others to receive regular email updates from the Citizens Electoral Council of Australia.

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