Banks Should be not-for-profit?

[Aaron]

I was thinking over the recent economic developments that have been occurring and have come to the conclusion that I think banks should be not-for-profit. This is a definition that I think fits:

An organization that channels any funds remaining after paying operating expenses back into programs and services rather than sharing profits with owners, shareholders and executives.
What's your opinions?

[SnackaryBinx]

lol, like those wealthy ****s would approve that.

[Sunshine]

The whole system would crash and burn.
Which might be cool and all, but it'll never happen.
Y'know the standard conspiracies, banks rule politics and the country and all that, rich sonsofbitches that they are.

[Dave de Sylvia]

Public banks are not really any less susceptible to irresponsible borrowing/lending than private banks, and that's not really the issue here. Profit incentive is integral in ensuring the banks borrow responsibly- it was predatory and unsustainable lending that prompted the latest bank crisis. And that's better discouraged by strict regulations than nationalising banks, which would only replace existing risks with different ones.

[JohnXDoe]

well it sounds nice but how about less profit

i've often wondered why they have to make so damn much? i mean 20% on the dollar for a credit card loan? what do they buy and sell? its a great service, but that seems much

i know some people default on loans, etc....but it seems the banking system can handle it without charging out the butt with interest, penalties, and silly fees on the rest of us.

i've also often wondered why people with more money and
"better" credit get better interest rates. and sometimes not even with more money. i mean "better" then those just starting out or who have a good payment history. if you have a solid income and are employed or have a good source of cash from somewhere everyone should pay the same or similar or at least get the preferred rates of "preferred" customers

this whole mortgage thing. what a mess. trying to deliver the American dream in Bush's "Ownership Society" but in a back handed and sneaky way. wtf happened?

so far as i can see this is what happened. some Americans are just getting by, they have families, etc. they want to own a home, they want to be a "part of"

so the banks in full greed mode are like "hey how can we make even MORE money." so they figure to hand out these backward loans to people who can't really afford them. the banks, and foolishly enough the people buying the homes, (because they are conditioned to believe in economic fantasy) think in this go go economy (or so it seemed) that although they can't afford the loans in six or seven years when the FULL payment kicks in well....they're be doing A LOT better. oh yeah we live in AMERICA where everyone can afford their mortgage to DOUBLE in six years so you can pay for the home you CAN'T AFFORD

because as you know, in America the DREAM is real and possible for ALL


i'm mad as hell and i aint gonna take it anymore!! :angry:

[Dave de Sylvia]

well it sounds nice but how about less profit
Well the reason for the latest crisis was that they weren't making any profit- they were making massive losses.

i've often wondered why they have to make so damn much? i mean 20% on the dollar for a credit card loan? what do they buy and sell? its a great service, but that seems much
There will always be a certain amount of people who will default on their credit card or loan, so they have to charge a higher rate than the profit they want to make- i.e. if they need to turn a 5% profit on lending, they might need to charge 8% to offset the people who didn't pay at all. Obviously, increased rates increases the number of people defaulting, meaning rates often increase to maintain revenue. 20%, though, is just robbery.

i've also often wondered why people with more money and
"better" credit get better interest rates. and sometimes not even with more money. i mean "better" then those just starting out or who have a good payment history. if you have a solid income and are employed or have a good source of cash from somewhere everyone should pay the same or similar or at least get the preferred rates of "preferred" customers
Well you said it- the more cash a person has, the more likely they are to pay their loan. Banks like giving loans to rich people/companies because they can turn a profit without really needing to worry about them defaulting, so they're offered lower rates to attract them in.

[Aaron]

Public banks are not really any less susceptible to irresponsible borrowing/lending than private banks, and that's not really the issue here. Profit incentive is integral in ensuring the banks borrow responsibly- it was predatory and unsustainable lending that prompted the latest bank crisis. And that's better discouraged by strict regulations than nationalising banks, which would only replace existing risks with different ones.
I'm not discussing private v. public banks. I'm discussing the nature of how they use the money they get in their coffers, and whether blanket rules should be applied.

[badtaste]

I was thinking over the recent economic developments that have been occurring and have come to the conclusion that I think banks should be not-for-profit.

So what was the reasoning that led to this conclusion?

[Aaron]

That there's such descrepancies in the way really similar organisations within an industry [aka different banks] use their money, when realistically they're offering the exact same service.

[Dave de Sylvia]

I'm not discussing private v. public banks. I'm discussing the nature of how they use the money they get in their coffers, and whether blanket rules should be applied.
Well I doubt the banks are going to voluntarily become not-for-profit, and I doubt anybody would voluntarily risk their money funding a not-for-profit commercial bank. There's a reason credit unions are localised, and it's because the idea doesn't really work on any great scale outside of the community.

[Aaron]

Sorry to be vague; by blanket-rule I meant legislation. I think it'd be financially and economically effective for leglislation to be passed making financial-service companies [banks, advisors, insurers] not-for-profit. You could still publicly list the company, it's just that it'd not give dividends except for at certain points [ie when they frank the share or if they release some capital to shareholders as they've hit a surplus point]. The only reason it's not viable on a large scale is because the alternative is there.

[badtaste]

That there's such descrepancies in the way really similar organisations within an industry [aka different banks] use their money, when realistically they're offering the exact same service.

I don't see the problem in that.

[Dave de Sylvia]

Sorry to be vague; by blanket-rule I meant legislation. I think it'd be financially and economically effective for leglislation to be passed making financial-service companies [banks, advisors, insurers] not-for-profit. You could still publicly list the company, it's just that it'd not give dividends except for at certain points [ie when they frank the share or if they release some capital to shareholders as they've hit a surplus point]. The only reason it's not viable on a large scale is because the alternative is there.
Think about it for a moment.

A not-for-profit bank doesn't imply a not-for-loss bank. Not-for-profit corporations are always either a) publically-funded, or b) backed by a benevolent donor who has the means to absorb any sort of monetary loss.

Using the current crisis as an extreme example, who other than the Fed has $80bn in reserve in case of collapse?

[Aaron]

That's a fair point and I'm in agreement, but the government does have a responsibility to all parties [including firms] that pay taxes and are within their domain. I have no problem with "bail-outs" where it's done in a structured and responsible way.

What I was more at with this thread was that removing the profit-focus of executives and staff will increase productivity and less the impact of recessions and economic events.

[Dave de Sylvia]

In what way do you think it would increase productivity?

[Aaron]

Well I meant productivity for the industry collectively [ie banks not failing]... but each firm will have a focus on increasing their surplus to make their services more attractive to potential customers. I mean, I want my money managed by someone who can guarantee to be turning over a high interest rate... It's the anti-cartel.

[Smokey D]

I can't see why a company would want to exist at all if it wasn't getting any profit. Even if you legislated to force the market to operate at cost, you would just drive out operators and make things more expensive.

[Aaron]

It is made up of people... it's not this one organism.

[Smokey D]

Yeah but people like to make profits. What incentive to they have to expose themselves to risk if they can't make a profit?

[Aaron]

They get a decent wage. I'm not saying bankers should be poor, but I think the shift in the industry needs to be from that of a profit-maker, to that of a service-provider. I hate the arguement that "a company's primary role is the increase profits for its stakeholders" being used to justify unethical behaviour. A company's primary role is to provide the service they exist for, in my opinion, and to do it in a socially responsible way.

[Smokey D]

But unless the bank is somehow shielded from losses, failure to make a profit will inevitably lead to failure of the bank. Also, if no profits are being made who pays the bankers? ANd where does the money come for to make loans?

And no matter how you rig it, restricting profits decreases supply which drives up price.

Also, company's are obliged by law to maximise profits. That's why people say that.

[Aaron]

But unless the bank is somehow shielded from losses, failure to make a profit will inevitably lead to failure of the bank. If a bank can't make a profit then it shouldn't be a bank. I'm not saying that they should not operate in a way that attempts to make them profitable, I'm saying that they shouldn't pass on benefits to stakeholders, just reinvest it.

Also, if no profits are being made who pays the bankers? ANd where does the money come for to make loans?
As I said, I think you misunderstand my point of view. Not-for-profit does not = no profit, it just means that they don't pass on the profits to stakeholders. Think of not-for-profit healthfunds; they operate to minimise the cost [beyond the outlay of customers] for health services.

And no matter how you rig it, restricting profits decreases supply which drives up price.
Not in this case, as I stated, it just increases the buffer banks have to protect themselves from the debts that take on, which means stupid situations are less likely to occur if they operate effectively.

Also, company's are obliged by law to maximise profits. That's why people say that. Only if legislation is set in such a way, which it doesn't have to be.

[Smokey D]

If a bank can't make a profit then it shouldn't be a bank. I'm not saying that they should not operate in a way that attempts to make them profitable, I'm saying that they shouldn't pass on benefits to stakeholders, just reinvest it.

Oh. That's different to what I thought you meant.

Where would a bank get the capital to establish itself/operate smoothly/expand if it didn't have a financial relationship with investors?


As I said, I think you misunderstand my point of view. Not-for-profit does not = no profit, it just means that they don't pass on the profits to stakeholders. Think of not-for-profit healthfunds; they operate to minimise the cost [beyond the outlay of customers] for health services.


I think you have to explain the mechanics of your plan a little more.

Not in this case, as I stated, it just increases the buffer banks have to protect themselves from the debts that take on, which means stupid situations are less likely to occur if they operate effectively.


No. Placing an effecitve price ceiling on anything always reduces supply.

I think there are plenty of ways to protect/regulate against bad debts without fundamentally changing the shape of the financial system.


Only if legislation is set in such a way, which it doesn't have to be.

Yah I know I was just saying why people say that.

[Aaron]

Oh. That's different to what I thought you meant. I'm not that much of a crazy socialist. :lol:

Where would a bank get the capital to establish itself/operate smoothly/expand if it didn't have a financial relationship with investors?Well aside from the fact that they already exist, I see there being lots of ways.

eg,
Banks don't have to be independent organisations. They can be an arm of a corporate group [ie part of BHP or McDonalds] and be staff-orientated.

Governments could using something like Standard & Poor to rate banks, and award grants to top performers [ie the bank that achieves the lowest cost for a certain product while still exceeding expectations]

I think you have to explain the mechanics of your plan a little more.^ see above.

No. Placing an effective price ceiling on anything always reduces supply.I don't think price ceilings need to be added. I think the APRAs, the regulators need to become more involved in ensuring that targets are set and achieved. Rather than penalising failures, they should encourage good behaviour on a corporate level. "Acknowledge quick wins," to use a corporate buzz term.

I think there are plenty of ways to protect/regulate against bad debts without fundamentally changing the shape of the financial system.^ as above again.

Yah I know I was just saying why people say that.I c.

[DBoons Ghost]

They get a decent wage. I'm not saying bankers should be poor, but I think the shift in the industry needs to be from that of a profit-maker, to that of a service-provider. I hate the arguement that "a company's primary role is the increase profits for its stakeholders" being used to justify unethical behaviour. A company's primary role is to provide the service they exist for, in my opinion, and to do it in a socially responsible way.


Do you honestly think this is true? Rants like JxD's mke me sick because of the pure ignorance and this is making it worse. American dream? Wtf? If you're stupid enough to live out of your means then **** you. You're not helping, but making it worse for all of us who to suffer when your file ****ing bankruptcy.

Banks hold you money. That is the service they provide. They provide you with a savings haven that collects interest, which is a lot better then putting in a shoe box under your mattress. They offer CDs, and many other means of turning your money into profit merely by letting the bank hold it for you.

No one, and I MEAN NO ONE told ANYONE to ever get a credit card, or max it out, or live out of your means, or use the services they provide simply because they're there.

Beside the fact that they are all seperate entities. Visa, Mastercard, Amex, Discover, all are seperate corporations that banks lease use of to stamp their name on the cards and use the credit card services to operate for them.

ATM cars, debit cards, all services provided by YOUR bank at which they normally take a loss if not for sheer volume.


If you're talking about investment banks, the only tie they hold to savings and loans banks is in name. You can't open a bank account at Merrill Lynch, Bear Stearns, Morgan Stanley..

Clarify. Do you mean to think that investment banks should be not for profit? Or do you mean Washington Mutual type savings and loan banks should be not for profit?

Neither makes any sense and no one in their right mind would be able to do that. Their profit comes from interest on loans, and the system is designed for smart people who aren't gullable retards who treat banks like Vegas.

[FallingSnow]

The entire financial system would fail if financial institutions and lenders were not for profit. Simple as that.


/thread

[Aaron]

FallingSnow: How? Explain.

Clarify. Do you mean to think that investment banks should be not for profit? Or do you mean Washington Mutual type savings and loan banks should be not for profit?

Neither makes any sense and no one in their right mind would be able to do that. Their profit comes from interest on loans, and the system is designed for smart people who aren't gullable retards who treat banks like Vegas.
I mean both. Instead of ranting off topic, explain your opinion in economic terms. Provide an arguement that's based on concepts, instead of your opinion. Did you even read the entire thread?

[DBoons Ghost]

FallingSnow: How? Explain.


I mean both. Instead of ranting off topic, explain your opinion in economic terms. Provide an arguement that's based on concepts, instead of your opinion. Did you even read the entire thread?

Lol.. Rant off topic? I was more responding to JxD as well as calling you stupid for being stupid.

If you would like me to "explain my opinion in economic terms" college boy, first explain to me which banks are you targeting?

You didn't specify. You just said "banks". Now, normal banks like Chase, Citi, etc.. who provide banking services to consumers are clearly and obviously unaffected by this situation.

So, investment banks, are who you meant. Right? Do you realize how much of an oxymoron it is to say an "investment bank" driven by it's sole purpose to PROFIT in the billions preferebly, should be not for profit?

The only fact here is you don't know the difference between the two and clearly have little concept of what you're trying to accomplish. Don't try and go college boy on me because you made no sense.

[JohnXDoe]

their was nothing wrong with my post. i didn't lay everything on the banks. and i did say people were foolish to go down that road

plus i am against "bailing out" homeowners

nothing else i said was unreasonable. if you think predetory lending schemes are ok...well that's fine for you i guess. no one has to be accountable except US left holding the bill

the banks and big money people? oh yeah...they're the nice guys

pfft

victims of dumb borrowers :(

[DBoons Ghost]

their was nothing wrong with my post. i didn't lay everything on the banks. and i did say people were foolish to go down that road

plus i am against "bailing out" homeowners

nothing else i said was unreasonable. if you think predetory lending schemes are ok...well that's fine for you i guess. no on has to be accountable except US left holding the bill

the banks and big money people? oh yeah...they're the nice guys

pfft

victims of dumb borrowers :(


Predatory lending schemes require ignorant prey. Sorry.

The banks and "big money people" are seperate entities. No, it's not ok with me, merely for the fact that I have to suffer for ignorant morons stupidity. I am earning mine and doing my best to be smart about it. Why can't other people? I'm a moron dude. I have nothing past an 8th grade education. If I can do it without falling apart why can't other people? It makes me ****ing crazy. Then I gotta come here and see chicken little threads and then something as absurd as this. This idea is absurd.

US is left holding the bill because they failed us all by letting Wall Street do their thing, and I'm fairly sure everyone in the pertitnent postions of our government got their kickbacks to turn a blind eye. Make no mistake.

However, if people were smarter instead of greedy, and I mean EVERYONE, this would never have happened. Our country is filled with superficial dopes who got what they deserved, and for them I have no pity. I am pissed because it affects my bottom ****ing line, and for that I have no patience or pity.

[DBoons Ghost]

Hey Aaron you're a good guy and I ruined this thread with my angry spew. I shouldn't have insulted you. I'm sorry.

[JohnXDoe]

Predatory lending schemes require ignorant prey. Sorry.

The banks and "big money people" are seperate entities. No, it's not ok with me, merely for the fact that I have to suffer for ignorant morons stupidity. I am earning mine and doing my best to be smart about it. Why can't other people? I'm a moron dude. I have nothing past an 8th grade education. If I can do it without falling apart why can't other people? It makes me ****ing crazy. Then I gotta come here and see chicken little threads and then something as absurd as this. This idea is absurd.

US is left holding the bill because they failed us all by letting Wall Street do their thing, and I'm fairly sure everyone in the pertitnent postions of our government got their kickbacks to turn a blind eye. Make no mistake.

However, if people were smarter instead of greedy, and I mean EVERYONE, this would never have happened. Our country is filled with superficial dopes who got what they deserved, and for them I have no pity. I am pissed because it affects my bottom ****ing line, and for that I have no patience or pity.
i agree and i share the same views about money and being responsible about it. personally. i would never go into a hghi risk financial endeavor like buying something for half a million dollars (a home) that i couldn't afford

i would like to know WHY they were given this opportunity, however? why, if the banks and economist who work for them...if they are so smart with money and finance....did they let this happen

on "Wall Street" is everyone really so consumed with money that at one point the blinders go on and its just about what.....blind greed? more more more?

i don't fully understand what happened. and i do understand the economy is beyond government to some degree. but not completely

i think government can be a positive force. i think the culture of "economy," so to speak, that we have had under Bush, letting money and lower taxes DICTATE the tone and direction of the country, has contributed to this in a big way

government isn't looking....lets get dirty. so everyone got dirty

i have no answers, obviously. and prolly don't understand how the economy "works" as good as some. but this...this is some fuked up crap. and it didn't work and it happened under Bush. so...i lay it at his "small government" feet. because as you know "government involvment in the markets is bad for the economy"

lolol but not :(

[badtaste]

They get a decent wage. I'm not saying bankers should be poor, but I think the shift in the industry needs to be from that of a profit-maker, to that of a service-provider.

Bank provides services, bank makes profit, bank invests money into providing better services. Eventually makes the market more efficient and competitive or something (I'm going on vague memories here).

I hate the arguement that "a company's primary role is the increase profits for its stakeholders" being used to justify unethical behaviour. A company's primary role is to provide the service they exist for, in my opinion, and to do it in a socially responsible way.

Surely, you can still make a profit and do it in a socially responsible way.

Banks don't have to be independent organisations. They can be an arm of a corporate group [ie part of BHP or McDonalds] and be staff-orientated.

Wouldn't there be problems of incentive and independence? No profit = no gain for a for-profit corporation (surplus =/= profit).

[DBoons Ghost]

i agree and i share the same views about money and being responsible about it. personally. i would never go into a hghi risk financial endeavor like buying something for half a million dollars (a home) that i couldn't afford

i would like to know WHY they were given this opportunity, however? why, if the banks and economist who work for them...if they are so smart with money and finance....did they let this happen

Because the gamble was almost worthy. Contractors built a lot of homes since 2001. The economy suffered a little due to panic and fear after 9/11. Things got stable and one area of the market that had no "product based trading" (or regulation for that matter) was in the residential and commercial mortgages. Home Equity is generally underutilized. By creating a loan system based purely off that equity and all it's potential, you can present a low income family with a guarenteed investment and begin to build equity in yourself. It's something everyone dreams of. There is no better guarentee then real estate right? Fannie Mae and Freddie Mac had programs geared around this for decades, and people benefitted from these programs. Now that the bubble was expanding quicker then anyone imagined, the Wall Streeters saw the potential for profit and took the reins.

on "Wall Street" is everyone really so consumed with money that at one point the blinders go on and its just about what.....blind greed? more more more?

Yes dude. Americans are consumed with money. People in general are consumed with money. How can you not know this? People who invest and greedy Wall Street brokers. Greed is what drives them. Greed is sometimes healthy for competition and ingenuity in new exciting ways to make money.

i don't fully understand what happened. and i do understand the economy is beyond government to some degree. but not completely

i think government can be a positive force. i think the culture of "economy," so to speak, that we have had under Bush, letting money and lower taxes DICTATE the tone and direction of the country, has contributed to this in a big way

I don't fully understand every aspect of what is happening but government's responsiblity is to the infrastructure of this country and the protection of it's citizens both here and abroad. The economy is a seperate entity driven by a captialist system of free enterprise which entails a lot more then we should cover in this thread.

government isn't looking....lets get dirty. so everyone got dirty

i have no answers, obviously. and prolly don't understand how the economy "works" as good as some. but this...this is some fuked up crap. and it didn't work and it happened under Bush. so...i lay it at his "small government" feet. because as you know "government involvment in the markets is bad for the economy"

lolol but not :(

Government isn't supposed to look. They're supposed to do nothing with regards to the economy. It runs itself really. People still got rich of all that is going on and continue to, and if you think they care about anyone now that they have theirs, you're kidding yourself.

[FallingSnow]

If you think the whole recession is Bush's fault, you're fairly naive when it comes to economics.

@JohnXDoe

[FallingSnow]

FallingSnow: How? Explain.




Two words: Profit incentive.

A few more: Private for profit industry=higher financial potential for everyone involved.

Please don't tell me you want the world to move that much further towards extreme socialism.

[Dave de Sylvia]

Well I meant productivity for the industry collectively [ie banks not failing]... but each firm will have a focus on increasing their surplus to make their services more attractive to potential customers. I mean, I want my money managed by someone who can guarantee to be turning over a high interest rate... It's the anti-cartel.
But what incentive do invest my millions of dollars opening a bank for minimal profit, when I can just put it all in an account and make whatever per cent a year? Banking is a hugely risky business and profit is the reason people are prepared to take that risk. The moment not-for-profit banks start to fail, any smart businessman would pull his money straight out and run- and where would that leave the banking system?

[JohnXDoe]

Because the gamble was almost worthy. Contractors built a lot of homes since 2001. The economy suffered a little due to panic and fear after 9/11. Things got stable and one area of the market that had no "product based trading" (or regulation for that matter) was in the residential and commercial mortgages. Home Equity is generally underutilized. By creating a loan system based purely off that equity and all it's potential, you can present a low income family with a guarenteed investment and begin to build equity in yourself. It's something everyone dreams of. There is no better guarentee then real estate right? Fannie Mae and Freddie Mac had programs geared around this for decades, and people benefitted from these programs. Now that the bubble was expanding quicker then anyone imagined, the Wall Streeters saw the potential for profit and took the reins.

Yes dude. Americans are consumed with money. People in general are consumed with money. How can you not know this? People who invest and greedy Wall Street brokers. Greed is what drives them. Greed is sometimes healthy for competition and ingenuity in new exciting ways to make money.

I don't fully understand every aspect of what is happening but government's responsiblity is to the infrastructure of this country and the protection of it's citizens both here and abroad. The economy is a seperate entity driven by a captialist system of free enterprise which entails a lot more then we should cover in this thread.

Government isn't supposed to look. They're supposed to do nothing with regards to the economy. It runs itself really. People still got rich of all that is going on and continue to, and if you think they care about anyone now that they have theirs, you're kidding yourself.
for some reason i can't be that cynical about things. i mean i'm a cynic, but that just sounds hopeless

change is coming. Barack will show us how :)

certain things in your above post....just need to be changed a bit. it will happen. because it has to

"capitalism" will always be our economic system. but we need not let it steal our souls

its just sad

also the idea that government should only be responsible for infrastructure and defense is bogus. if they want my money they need to do more then give me a goddamn road to travel down. and when i say "give me" i mean represent myself and my countrymen well. government "for the people, by the people"

not "for the dollar by the dollar"




If you think the whole recession is Bush's fault, you're fairly naive when it comes to economics.

@JohnXDoe
i never said that and i know shi.t about economics

so i actually have a lot in common with Bush and the Wall Streeters :smoke:

[DBoons Ghost]

Well, at least you're on the Obamatrain now.

That's a start!

[griftadan]

no this is ridiculous, no one would invest anything if it was all risk no reward, much less go to school to learn how to do this ****

[BridgeToSolace]

If you would like me to "explain my opinion in economic terms" college boy, first explain to me which banks are you targeting?

Hahahaha.

Dboon is a fantastic poster. Thank you, sir, for spending your time here.

[Aaron]

Woah, too many posts to address. But...

no this is ridiculous, no one would invest anything if it was all risk no reward, much less go to school to learn how to do this ****
Not every company has to be publicly listed, and given the complexity and importance of the role that banks [both savings & loan and investment banks] play within the economy in terms of stablising the currency for trade and inflation, I don't think it's such a bad idea to limit the amount of financial institutions that are. Modern firms put too much effort into meeting the expectations of their stakeholders, and should in my opinion, shift their focus into meeting the expectations of customers and the economy. For a bank to disregard it's role in the economy in macro terms, in order to maximise profits [which it's obvious has been done, lets be honest] is irresponsible at least, and if analysed more closely would be seen as criminal [remember cartells are illegal].

My purpose for starting this thread was to start discussion around the role of collective banks as a whole within the economy, not to discuss A bank being not-for-profit in a climate where everyone else is not, which I'm not sure people have grasped. I wanted to discuss why I feel banks need to change their vision and purpose from that of a profit-driven stakeholder-based purpose, to one that recognises both the macroeconomic and microeconomic effects that their actions result in.

College boy.
Actually I work for a bank. But I still love you. :)

[FallingSnow]

My purpose for starting this thread was to start discussion around the role of collective banks as a whole within the economy, not to discuss A bank being not-for-profit in a climate where everyone else is not, which I'm not sure people have grasped.

It wouldn't work even if everyone jumped on the bandwagon. It's simply not the nature of the industry.

Actually I work for a bank. But I still love you. :)

Hahaha. pwn'd. Good job.

[BridgeToSolace]

You can be a college boy without being in college.

[Aaron]

It wouldn't work even if everyone jumped on the bandwagon. It's simply not the nature of the industry.
It's not the nature of the industry, just the executives. Most of the industry don't recieve huge incentive-based pay packets, just a select, and unfortunately influencial, few.

[mph4ever]

Well I doubt the banks are going to voluntarily become not-for-profit, and I doubt anybody would voluntarily risk their money funding a not-for-profit commercial bank. There's a reason credit unions are localised, and it's because the idea doesn't really work on any great scale outside of the community.
it appears to me that bush is about to turn the american tax payer in to the ultimate not for profit investor organisation if he gets his way with the bail out
That's a fair point and I'm in agreement, but the government does have a responsibility to all parties [including firms] that pay taxes and are within their domain. I have no problem with "bail-outs" where it's done in a structured and responsible way.

What I was more at with this thread was that removing the profit-focus of executives and staff will increase productivity and less the impact of recessions and economic events.
for as long as there are chief executives who crave reward whilst their shareholders can hire and fire them based on their profit performance then we will never be rid of this. nice ideal but not very practical

and on a side note, paul newman's food company made upwards of 100,000,000 profit which was donated to his charities. so it can be done, just not very well in the banking sector

[FallingSnow]

It's not the nature of the industry, just the executives. Most of the industry don't recieve huge incentive-based pay packets, just a select, and unfortunately influencial, few.

It is the nature of the industry though. The whole reason banks become successful is because of the profit incentive involved in the type of business it is. The executives, through this ideal, are what drives the businesses....through risktaking and competitiveness. Often, obviously, those risks fail, but that's also the nature of capitalism....the strongest survive, the weak fall by the wayside.

[Aaron]

Who said that capitalism is the right model FallingSnow? I think you're forgetting that there are other models, and as mph4ever has highlighted there are companies out there with different idealogical motivations who are successful within the capitalist model.

[DBoons Ghost]

Actually I work for a bank. But I still love you. :)

Well, I'm glad you do. I hope you saw my apology for being a dick. I have been under a lot of stress due to this mess and I guess I dicked out.

I work for a bank too. 15+ years working for nothing but Investment banks. Barclays, ABN Amro, HSBC, UBS.. I also consulted at a couple American firms like Saloman Smith Barney before it was bought, as well as Instinet who basically wrote the book on ECNs and aftermarket algorithym based trading.

I don't know much about retail banking, but I know a LOT about investment banking.

[Aaron]

I did sir, thank you sir. I figured as much and let you post a bit. Water off a duck. I'm the other side; business analyst in our risk and fraud division [insurance arm of Suncorp-Metway]. Deep down the rabbit hole.