Incoming Westpac chairperson John McFarlane has conceded that banks are 鈥溾, though he blames the industry鈥檚 bad image on its pursuit of short-term gains over long-term returns.
The truth is, scandalous bank rip offs have been going on for a long time but, until recently, they thought they could get away with it. No doubt bank managers considered monstrous fees, dodgy investments and other crimes against customers to be part of their long-term, profit-making strategy.
Of course, not all customers are treated the same. Banks have always made sure to look after their biggest customers - and their ill-gotten gains.
The Australian Transaction Reports and Analysis Centre (AUSTRAC), a government agency that monitors financial transactions, has Westpac of 23 million alleged breaches of money laundering laws.
Media reports have focused on a convicted child sex offender who sent money to the Philippines via Westpac鈥檚 international money transfer system. Yet, most of the $11 billion in suspect transactions were for .
Macquarie Bank is also being investigated for facilitating tax evasion. reported on January 24 that German tax authorities were investigating Macquarie Bank鈥檚 current and former chief executive, as well as 60 other employees, past and present.
Macquarie Bank was allegedly one of several financial institutions that 鈥渆xploited a legal loophole which, at the time, allowed two parties to simultaneously claim ownership of the same shares, and therefore claim tax rebates which they were not entitled to.鈥
German authorities are trying to recover billions of euros lost through this scam.
An Oxfam briefing paper released in January,, notes: "With armies of tax advisers at their service, multinational corporations exploit loopholes in tax codes to shift profits to tax havens and avoid taxes, costing developing countries an estimated $100 billion of lost corporate income tax annually.
鈥淭hese are financial revenues that are urgently needed for investment in public services and care-related infrastructure.
"Instead, governments are over-relying on regressive consumption taxes like [goods and services taxes], which place an undue burden on anyone living in poverty and on carers...
鈥淎t the same time, these are the very people who have limited or no access to the public services that their tax contributions pay for, especially when services are privatised or fee-paying.鈥
Banks are hated for good reasons: they rip off and abuse ordinary customers while helping their richest clients spirit away ill-gotten gains. In other words, they help keep the poor poor while making the rich even richer.
That is why McFarlane鈥檚 comments, reported by on January 24, that "relentless bank-bashing and punitive sector-specific policies will hit returns and erode the industry's $14 billion contribution to government coffers鈥 simply rub salt into the wounds of the many victims of the banking industry.
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