MANA SUPPORTS THE PETITION TO STOP BANKS TAKING YOUR MONEY

MANA SUPPORTS THE PETITION TO STOP BANKS TAKING YOUR MONEY

Posted on March 26, 2013 by admin in Press Releases

The government is setting in place a system that will let your bank take money from your account if the bank gets into trouble and needs to be bailed out. Signatures are being collected for a petition that asks the government to hold an inquiry into finding other ways to make banks stable.

Banks make huge profits for their owners by charging interest on loans and mortgages and by charging bank fees. Four of the biggest banks in New Zealand – ANZ/National, BNZ, and Westpac – are not even owned by New Zealanders. They are owned by Australian banks, who are in turn owned by UK and US banks, and the profits go there not here. Why should New Zealand customers or taxpayers bail out the banks when they get into trouble?

The reason why banks sometimes get into trouble is because they loan out far more money than they actually have in their vault, they invent ‘virtual’ money. They do this because the more they loan out, the more profit from interest they make. If too many people come to withdraw their money at the same time, the money is simply not there and banks want to be able to take their customers money to solve the problem. It sounds crazy but it’s true. Another solution is to make sure banks can only lend out what they have. It’s called 100% reserve banking. Most banks in New Zealand operate on 8% reserve banking.

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