Saturday, April 25, 2009

Bank Guarantees: The Return of Bryce

I mentioned to one of my email correspondents that I would return in a few months to see my bank manager, "Bryce" at the ASB Bank in Albany after having seen him first late one Thursday at the end of February to re-negotiate the terms of our rather large mortgage.

I did, sort of.

This time Bryce was unwilling to see me after my hard workday so we discussed the matter over the mobile.

I would have preferred to see him in person but he insisted I couldn't.

I pointed out to him, again, that the New Zealand taxpayer was guaranteeing banks in New Zealand so they could borrow cheaper money from abroad to lend to us.

Bryce pointed out to me that it wasn't the taxpayer that was going guarantor,it was in fact the Government.

After pointing Bryce to the error of his ways over the fact that Government and the taxpayer were one and the same (Bryce still doesn't think they are) I thought out loud that wasn't it funny that as a borrower from his bank, the ASB, that I was now a guarantor for my loan but also as a taxpayer I was going guarantor for his bank to borrow the same money to lend back to me.

This seem to confuse Bryce but it was very clear to me.

I added what I said at our Thursday evening meeting in February, that we are clearly living in exceptional economic times, something Bryce agreed with during the mere half dozen times I repeated that same mantra.

Bryce said I would be breaking my contract with the bank if we re-negotiated without an outrageous bank fee and I agreed with Bryce at that stage but had to point out that the terms of our contract had clearly changed because I was now going guarantor for both his and my borrowing, hence making it cheaper for Goldstein and his fat American buddy to borrow money in the first place.

We both became dizzy as I reiterate the above several times (I don't let go once I sink my teeth in) to no effect at all.

The bank will not negotiate at all, that is all he had to say from the get-go

Before we both left the conversation, Bryce pointed out that the bank had been around for 100 and something years and was "very safe" immaterial of any taxpayer/Government guarantees and then I asked him why then did the bank sign up to the guarantee and he kindly pointed out because that is what the other banks were doing and it wouldn't "be fair" to the ASB if they didn't join the party.

Fair... mmm, yes but, why?...

A asked whether the bank had these sort of guarantees during the 1930s, he didn't know, I left none the wiser and Bryce left probably wishing he hadn't returned my call.

I don't think Bryce is going to take another call from me.

I will however have another go in a few more months.



More Banking Madness @ Shareinvestor

Westpac: I'm Thinking of Returning





c Share Investor 2009