Horse 1013 - The People's Bank

http://business.smh.com.au/business/peoples-bank-to-break-the-big-four-20090707-dbtx.html
THE growing power of the Big Four banks has been targeted by a coalition of six influential economists, who have petitioned the Prime Minister and the Treasurer to set up an inquiry into Australia's financial system.
They have suggested the Government set up a "basic bank" so Australians can deposit money with Australia Post and have it managed by the Future Fund.

The so-called people's bank would be similar to New Zealand's successful Kiwibank, which was set up to break the dominance of the Australian-owned majors.

What a top idea! It's just a pity that it's so fundamentally flawed.

The whole concept of a bank set up by the people is far from a new idea. Virtually every building society, be it St George, IMB, The Rock & Hume were all set up by member; for members.
Bendigo Bank was set up as a series of "Community Banks", wherein the capital to set up the bank came from the initial pledgeholders, who then became shareholders.

The problem therefore is not the concept itself, which of itself is sensible and prudent, but the whole question of trustworthiness of the management of this new bank.

It's blatantly obvious that this new bank requires prudent management. If it is the Federal Government in charge, then there is nothing to stop the Government if it was going through dour times, from selling it. Remember that the Federal Government did once own a bank of its own and thanks to the guttersnipery of the then Keating Government, between 1991 and 1996 it was privatised. To be honest, the Labor and Liberal Parties have both shown that they're about as trustworthy as either Chairman Mao or Fuhrer Hitler.*

There's the rub. If "the people's bank" was to be set up and be managed by the Future Fund, which itself came about because of the sale of supposedly "the people's telecom" Telstra, then in say 2013 when the economy is really in economic kaka, then it too will be sold into private hands - so much for "the people's bank"

Or perhaps are these merely machinations or a governmental leak surrounding RuddBank?
http://www.abc.net.au/worldtoday/content/2008/s2600611.htm

*who started the "People's Republic" and the "People's Car"