death spiral?, page-27

Hey Rainbowgypsy,

I know this is the BBI thread, but this is my current experience with banks and probably why I work these stupid hours. I know not all BBI's bankers are Australian based.

The small guy is being hammered at the momment. Even small/medium business's that have excellent histories are having their facilities reviewed on more regular basis, usually with additional loadings above the base rate and extra security requirements.

Naturally this is placing extra stress on these enterprises as they have increasing compliance costs and asset risk,at a time when they are trying to perserve all their capital to ride out the recession.

The banks created the mess by diverging from proper lending criteria and if history is any guide will pillage the stable client to make there write-offs back.

Remeber when Westpac almost went down last recession, they were the first to introduce the raft of fees to banking. We already see the fee increases happening now(i.e. ATM charges). I believe this is just the start of the new charges.

I agree we need strong banks, but also responsible banks. However, they got the guarantee so they can access cheaper credit and then they have the hide to pass it on with increased risk percentages.

In the end the banks here will survive but at a great cost to the small/medium business sector and individuals, who will pay for their mistakes. Also they will not care about dillution issues as they relate to ordinary shareholders, only that they get there money back with interest.

It is not a good look being the first to put your hand out for government help, then refuse to extend the benefit of that assistance to business. In reality however, I think they don't really care how it looks.

Cheers