State-Owned Bank

Banks are such a fundamental aspect of life, and it is disheartening for anyone who doesn’t have bank shares to see the extraordinary profits they make each year.  Surely those profits could benefit all, not some?

The Big 4 banks are here to stay, but some legitimate competition could lower their profits to less stellar levels.

We propose a state-owned bank that has less-sophisticated offerings, at a more competitive rate:

  • basic savings accounts
  • debit cards
  • mortgages on owner-occupied homes only

And that’s all!

Primarily an online service, there would be branches within reasonable travelling distance in major cities, say every few suburbs.

By offering only a bare-bones suite of services, overheads will be low, leading to lower rates. The government can set interest rates on savings and mortgages higher/lower than the Big 4. They’ll still have plenty of offerings to profit from, but the Big 4 will be forced to offer close to what the state-owned bank provides for the simple products.

There will be no risk to the government – mortgages will be only provided to owner-occupied homes, and the required deposits will be perhaps 15% or 20%. They will capture the easy wins of the Big 4, and leave them with the hard work.

But Why?

  1. The general public despises the profiteering of major banks
  2. All state-owned bank profits will end up in the public purse and benefit all
  3. The government will have a mechanism for controlling interest rates