Report shows Australia's banks use financial crisis to cover gouging

10:30, May 09, 2010      

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An Australia's study on Sunday revealed that big banks have used the global financial crisis as an excuse to gouge customers while boosting staff pay packets and posting record profits for shareholders.

The University of Canberra study has found banks were overcharging customers through bigger profits on mortgages, higher fees and lower savings rates compared with before the global financial crisis.

The study said official statistics prove banks have been lying to the public about their financial health.

"They (Westpac, the Commonwealth, National Australian Bank and Australia and New Zealand Bank) have been crying poor throughout the global financial crisis and yet official data shows that they have been misleading, to put it mildly," said Milind Sathye, professor of banking and finance at the University of Canberra.

The university has used statistics from the Australian Prudential Regulatory Authority (APRA) to monitor the banks' financial well-being.

"This means our conclusions can be openly scrutinized," Sathye said.

"The banks, on the other hand, make their arguments based on data that only they can see. And on that basis, they can argue almost anything."

The most recent APRA data showed that, far from cutting back during the crisis, banks actually increased remuneration for management and staff from 14 billion dollars (12.4 billion U.S. dollars) to 16 billion dollars (14.2 billion U.S. dollars) a year, a healthy 14.2 percent increase, while millions of ordinary workers were suffering pay freezes or reduced hours.

Source: Xinhua


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