Bank Fees - Michael Spence

Mr. Fitz Jackson and other like minds is “forget it”.



I am no member of the PSOJ but I would also reject any attempt to regulate bank fees would be a backward step in a global capitalist competitive free market they can stick to regulating JUTC fares.

The banks catch the politicians where they want them barking up the wrong tree. High interest rates and access to affordable loans are presently oppressive, debilitating and enslaving that is where they should be focusing. They have for decades allowed and encouraged banks to be engaging in interest rate gouging and profiting heavily many times on behalf of relevant governments. This talk of fees is a smokescreen and if I were a banker I would not even respond just use this blitz to trigger a marketing campaign lowering the fees and pushing up the interest rates which affect more people and push profits.

The people in Parliament themselves are not much better than any of us who neither do banking or economics and as a lay person i believe that their fee focus is a minor problem that only directly affects about 40% of the population who regularly interface with banks. Governments of the day have allowed an area complicit in fact with how the banks function through the Bank of Jamaica that set base rates that means the banks cannot realistically lend below that. Government coffers benefit from their actions through GCT and other taxes. The higher the fee the more taxes and GCT collected to fund whatever programs. Parliament should focus on doing things aimed at lowering interest rates to globally competitive rates then more of lowered fees would do the bank’s profitability trick as more people take productive loans. The excessive reliance on physical collateral is another economy stifling mercenary enslaving type of activity that holds back people with good business plans. Banks need to be modernized where banks do not become profitable through enslaving interest rates but through a multiplicity of reasonable fees and business services from bankable projects. Major banks locally some headquartered and operates in civilized economies are backward in their applied thinking but probably cannot be easily weaned from the industry of laziness “sopping up liquidity” and giving people money for doing absolutely nothing as if planning to buy the banks that lead to the ruination of the economy, banks and thousands of businesses. It is decades old government policy that has helped to fuel such backward thinking where people have gotten very wealthy from simply buying government paper in an industry of laziness. The market can regulate fees, have you seen what has happened in the mobile phone market? Bring in more banks and the market will deal with that. I have no confidence in governments that do not or ever have a reputation of getting banking right not “tax and borrow” all I would say to Mr. Fitz Jackson and other like minds is “forget it”.

Michael Spence