Greens Treasury spokesperson, Senator Peter Whish-Wilson, last night, delivered an adjournment speech on why the GFC is still with us and how the hangover of Keating-era deregulation of the financial system has left us exposed to more crises.
Excerpts of the speech:
Ten years on, the GFC is still with us. Despite record low interest rates, despite record low inflation and despite any number of measures to inject liquidity into the banking system, the GFC is still with us.
One of the root causes is right in front of us. A crisis founded on loose lending standards and a build-up of debt has been responded to, once again, with loose lending standards and a build-up of debt.
This is a financial system obsessed with speculation rather than production. In the mid-1980s, when Paul Keating let loose the animal spirits of the market, lending for business was double that of lending for housing. Now it's the other way around.
Many will want to wait for the conclusions of the royal commission before committing to any structural change. While I respect this view, I would say that we cannot afford ourselves that luxury. We must be prepared to act now—as much as anything, because the royal commission is only looking at half the story. We need to look at the big picture.
A good place to start would be to take a look at the Melbourne Economic Forum held last week on banking reform. The list of topics makes for familiar reading, if you've been following what the Greens have had to say about the future of banking.
Banking caused the GFC, and banking is one of the reasons the GFC is still with us. Financialised capitalism still dominates. It is focused on profit at the expense of consumers. It is focused on market power at the expense of competition. And it is focused on shifting risk onto anyone and everyone. We need to change this, and we can change this.