BANK MERGERS MUST BE
TRANSPARENT, PROFESSIONALLY
HANDLED AND MUST NOT BE POLITICALLY MOTIVATED
UNIONS must be CONSULTED
SBEU is particularly concerned that there are
no measures to safeguard the interest and job security of
employees. We note that BNM has given the Finance Companies the
flexibility to rationalize their operations. This will lead to redundancies.
SBEU will not allow retrenchment of our
members. Any redundancies must be managed through a voluntary
separation scheme with adequate compensation.
SBEU also calls for the parties involved in
any financial institution mergers to consult with SBEU and other
relevant Banking Unions so that the interests of the employees
are also taking into account.
SBEU CALLS for CAUTION
SBEU is not opposed to mergers. We believe
that the numerous Banks and Finance Companies should be
consolidated to better face the challenges of not only the
current economic crisis, but the long term challenges posed by
the liberalization of the Financial services under the World
Trade Organization.
However mergers must not be rushed through and
must be managed carefully and closely supervised by BNM. Bank
mergers must be spread over a period of time to avoid any major
upheaval and minimized adverse consequences. Bank mergers must
be allowed only if it is in the best
interest of all parties: the national economy, customers,
shareholders, employees and the community. There must also be
synergy in any mergers. Mergers amongst big banks should not be
allowed, as there will be massive redundancies. It will be
better for big banks to take over smaller Banks and Finance
Companies.
Mergers will not necessary be a good thing.
Reports in other countries have shown that if Banks merged they
may become too big and powerful for banking supervisors to
effectively supervise and control them, leading to dramatic bank
failures. The BCCI scandal in 1991 is a case in point. Mergers
can be best or worse of things. They can be sued to weaken the
best of lose a good occasion to punish the worst.
In a world where globalization is a key world
and practice, it will be indeed foolish for planners and
political leaders to be inward looking and use the so called
need to protect the state and country from foreign denomination,
even if the 'foreigners' come from another state in the same
country. One question begs to be asked. Who are we protecting,
the rich businesses or the ordinary citizens? Protectionism has
been proven time and again to protect and benefit the privileged
few at the expenses of the vast poor.
BANKING must be LEFT to BANKERS, NOT
POLITICIANS
One of causes of the financial crisis in the
region often cited by economists and policy planners and indeed
the IMF, is the close links between politics and business, and
indeed between politicians and Banks.
The problems in Indonesia, Thailand and S.
Korea are precipitated by the lack of supervision of Banks and
their lendings, especially to firms controlled by the
directors/owners of the Banks. Malaysia has so far escaped from
this problem, to an extent. Therefore BNM must not let any other
parties with vested interest any significant say in the mergers.
Banking must be left to bankers and BNM to
handle. We call for the introduction of laws to regulate mergers
and take overs to ensure that they must:
-
protect and advance the interest of
depositors
-
protect and advance the interest of
employees
-
protect and advances the interest of the
communities in which the bank operates
-
prosecute those responsible for reckless
lending decisions
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