Monday, April 18, 2016

Banking - Hidden and Regional

I read with great interest the changing of hands of stakes in the banking sector. Could this be the final re-emergence of the quiet one when old age, the Panama Papers or the end of an era is finally making the day of reckoning coming close at hand? Even President Raul Castro has to declare that the old guards must now really call in a day and let the young ones chart their own future. There is no greater curse in the world than a few arrogant fools think that they are the only ones who should rule the world and make the world go the way they want it to go. In the end, God is great and all men and women must die.

This post should be short and is at best conjectural. I cannot help myself in trying to put down my feelings on this issue.

Back in the old days when the world collapsed on us as a result of our own economic mismanagement when politicians controlled the finance of the nation and influenced banking decisions, the political decision was to consolidate the entire banking system into ten large banking groups ostensibly to better ensure the ability of banks to withstand major defaults and errors in lending (the banks would call them systemic failure which I think is a silly idea). At one stroke, all the small regional banks were wiped out and growth of the nation consequently was concentrated in Kuala Lumpur and Putrajaya which thereafter raised the need to solve city congestion problem, the need to build the MRT and the need to impose GST to fund it and other mega projects of the government.

We are now stuck with this PM/FM composite post of national inflation and currency depreciation where the central bank has lost control of the monetary policy and has nothing left but its own sense of authority and dignity. The counterplay between the treasury and the central bank has been lost and the central bank gives up on its independence on the conventional wisdom that the real central bank is the US Fed.

As men and women grow old and they will die even if they do not want to, there is a need for closure and the unraveling of the great matrix of cross-holdings just in case one suddenly dies and the great fortunes lie in the hands of non-family members and the great scam becomes an exercise in futility and foolishness. It is a good time to wrap up for one's progeny.

I was glad to read the suggestion by HRH The Sultan of Johor that Johor must have its own bank to be called the Bank of Johor to fund the development of the state and the funding requirements of its people. I agree. There is a need to revive the presence of regional banks which cater to the financial needs of their respective regions. The CEOs of the big banking groups in Malaysia which are headquartered in KL and Singapore and other major cities would not appreciate the needs of regional centres and their need to grow as the world grows bigger. After the centralisation of banks, I think it is right that the banking policy should be to diversify the ownership of banks and give rise to new regional banks to be established.

One tiny step for the PM/FM to move the nation forward in the right direction.


Vincent Ang said...

The Ketuanan Melayu-Islam heroes will never allow it because it would mean giving up their racial-religious right to milk Malaysian banks at will.

walla said...

Because politics was used to short-circuit economics, it would be impossible to talk about economics here without talking about the politics which has made its situation today so, unless one is just satisfied with conjectural homilies.

That situation marks the final stage of a socionomics whose result is made of three components - one, a middle-class going nowhere; two, institutions no one trusts; and three, political corruption that has spread from the kampung into the local city and then offshore out of the country until today local has become global mistrust of whatever makes this country which will inevitably accelerate more capital flight if not attenuate inbound investments so that the final quo vadis on millions of innocents will at best be a shadowy future under a climate of forlorn fear all because fealty was officialised towards those with neither standards nor values.

When personal standards and values are amiss despite abundant investments into socioeconomic engineering and religious fervor, checks and balances must be constantly upheld and operationalized without exception. The standards and values of these checks and balances must be those universally practiced independent of racial or religious connotations, to wit professional in content and spirit wherever in a modern, enlightened and progressive world, not the dark ages of zealotry and bigotry.

Why is that important in the context of the suggestion that bank ownership should be diversified? It is important because if there is no professional practice in place in the politics of this land, then even more diversified bank ownership in the world of economics will lead nowhere as the new owners will still have to tango with the same political interests who are as likely to change their spots as a leopard is to shed its skin for a hunter to make a rug simply because those contaminated interests know they can continue to draw power and wealth from the masses made of clueless uneducated simpletons with limited vision contained by an inability to see anything beyond their personal radius of a single line of simplistic thought furthermore to the exclusion of sympathizing with others not of their self-arrogated make.

Additionally, the key challenge today is how to reverse the bad branding that has all but destroyed the future of this nation. People outside will only do business with us on extremely difficult terms because they won't be sure we can pay even the interest of loans taken to close deals. It would be naive to think that sort of branding can be rehabilitated without changing the old system by which this country has been run right down into the subsoil. That old system is the present political regime. That we are too discrete to even admit it is emblematic of the problems which have persisted to this day.

When even an indon immigrant can retort 'mana ada lojik?' to what our feckless political so-called leaders have been saying, you know it is 1:57 in .

Is there a silver lining? For those who are going, look up at the sky on a cloudless night in a remote rural place south of the khatulistiwa. You cannot imagine how close and crowded with planets is the full splendor and magnificence of the Universe.

Beam up.

walla said...