From Nine's Today, Laurie Oakes interviewing Bob Brown:
BB: Well, I hear that the Opposition's joining the Government in refusing to back the Greens' legislation which is to remove the $2 fee for use of ATMs if you go to a different bank. That's a regressive tax, it hits poor people, it's totally unwarranted. The cost of those transactions to the banks - 50 cents to 75 cents Laurie, but they're charging everybody $2. If a pensioner withdraws $20, she gets hit a 10% tax. If I withdraw $200, it's only 1% and so on. It's totally wrong. It's not allowed in the UK, it shouldn't be allowed here. But we are aware also aware, and everybody's aware of the gouging of the public purse by the increased interest rates that the banks have taken unto themselves this week. The Government will, I understand, have legislation before the Parliament, maybe to look at price signalling and giving the ACCC greater powers there in the coming week. We will amend any Government bill or else introduce our own discreet legislation to put a 24-month lid on the banks doing what they've done in the last week again. We think that they should be prevented from going beyond the Reserve Bank increases in the coming 24 months. Or if the Reserve Bank puts the interest rates down, they should be required to go at least as far down as the Reserve Bank. And we'll see what happens. I'm very aware and everybody's aware of the $20 billion plus that the banks have made coming out of the recession, where taxpayers back them up through Government and parliamentary legislation. It's time they gave something back to the average Australian. And the Greens are going to ...
LO: Do you really expect though that - do you really expect the major parties will support this kind of regulation of interest rates?
BB: Yes, I do. And you know, Joe Hockey has been really strong on this. He's talking about the Government having sand kicked in its face by the banks while the Government does nothing. Well, now I put a direct challenge to Joe Hockey, and to Opposition Leader Abbott, to support the Greens in preventing the banks from doing it again. We can legislate to do it. Sound and fury's not good enough. This is hurting people. We want the Opposition to join the Greens to enable this legislation to go through before Christmas. The Government should be doing it as well, but the Greens are now putting both the big parties on notice. Penny Wong saying, during the week, that the increases this week Laurie were totally unjustified. We agree but let's take action to see that they can't do the unjustifiable again. Let's make it for 24 months. It can be reviewed then. It's reasonable. I think Australians would welcome it. The banks are going to continue to flourish. But let them be tied to what the Reserve Bank judges as a fair and reasonable interest rate rise, or drop, in the coming 24 months. I challenge both the big parties to get behind the Greens this week in Parliament to put this in to law.
Prima facie this looks like more populist obsession with interest rates and the asset side of the banks' balance sheets. The real problem is on the liability side, in the banks' reliance on offshore wholesale funding. But let's give Bob Brown the benefit of the doubt and investigate whether his measure would cure both.
On the asset side it does nothing to address causes but obviously restricts rates by decree. But on the liability side, it may actually do more harm than good and has questionable durability. What happens if we prohibit unilateral interest rate movements and global funding gets more expensive for the banks? The policy will either destroy profitability, cause a more swift government intervention in the form of a renewed guarantee and/or fall apart quicker than you can yell 'bankruptcy'. In any one of these circumstances it may also result in some credit rationing so may also harm the asset side of the balance sheet.
The Greens should be getting behind a Wallis Inquiry, not engaging in populist chest beating.