selling off first citizens

[mammadon]

does the government need to own a commercial bank?

[edyle]

Considering the recent financial crisis and the issue in the United States with banking and the example of NORTH DAKOTA which doesn't have the problem the rest of the states are having, it seems to me there is a definite advantage to having a state owned bank.


It has been a long standing war in the US with the private banks enventually winning that war in 1913 with the creation of the Federal Reserve system after the meetings at Jekyll Island, and the quiet introduction of the income tax (interesting coincidence).

As it stands, it would appear the private interests have enormous control over the financial system and even benefit unjustly from it as I have often asked: who gets the new money when new money is created by the fractional reserve system?

As far as I am concerned, governments ought NOT to be in the banking business, strictly speaking, but the banking system has changed away from savings and loans, towards -national- money CREATION. Until that problem is fixed governments need to be involved in banking. I had to specify 'national' money creation above, because there is no reason that private banks or other institution cannot produce their own local money in principle.

[vaio]

they won't sell it.

[Angie]

Do I have to come home and withdraw all my monies from FCB?

[saltwater]

they won't sell it.

Why do you say this..
I hv been reading since last yr they want to divest

[miktay]

Considering the recent financial crisis and the issue in the United States with banking and the example of NORTH DAKOTA which doesn't have the problem the rest of the states are having, it seems to me there is a definite advantage to having a state owned bank.


It has been a long standing war in the US with the private banks enventually winning that war in 1913 with the creation of the Federal Reserve system after the meetings at Jekyll Island, and the quiet introduction of the income tax (interesting coincidence).

No coinkidink. Income tax iza requisite of the Central Banking scheme that underwrites the Banking Cartel.

As it stands, it would appear the private interests have enormous control over the financial system and even benefit unjustly from it as I have often asked: who gets the new money when new money is created by the fractional reserve system?

The banks's best customers benefit most *fm new fractional reserve money. They get 2 spend da new money before it iz debased.

Commercial banks bessest customers are usually the State and large corporations.

As far as I am concerned, governments ought NOT to be in the banking business, strictly speaking, but the banking system has changed away from savings and loans, towards -national- money CREATION. Until that problem is fixed governments need to be involved in banking. I had to specify 'national' money creation above, because there is no reason that private banks or other institution cannot produce their own local money in principle

Big Gubbament ought not 2b involved inna great many things.

[vaio]

Why do you say this..
I hv been reading since last yr they want to divest

Because of the announced IPO? i don't think government will give up majority control of the bank with the IPO.

[Maccogirl]

they won't sell it.

Betcha a twenty yuh wrong

[vaio]

^ the Bank of Baroda talk?

[mammadon]

local banks are stable, and RBC (along with other Canadian banks) is also. private ownership per se is not the issue.

It just seems that a commercial bank can operate very well as a private concern. simply sell the shares to the public, and let the average Joe get a dividend in the event profits are made.

I could understand if for ideological reasons it should not be sold, but PP is not a socialist government.

[mammadon]

Considering the recent financial crisis and the issue in the United States with banking and the example of NORTH DAKOTA which doesn't have the problem the rest of the states are having, it seems to me there is a definite advantage to having a state owned bank.


It has been a long standing war in the US with the private banks enventually winning that war in 1913 with the creation of the Federal Reserve system after the meetings at Jekyll Island, and the quiet introduction of the income tax (interesting coincidence).

As it stands, it would appear the private interests have enormous control over the financial system and even benefit unjustly from it as I have often asked: who gets the new money when new money is created by the fractional reserve system?

As far as I am concerned, governments ought NOT to be in the banking business, strictly speaking, but the banking system has changed away from savings and loans, towards -national- money CREATION. Until that problem is fixed governments need to be involved in banking. I had to specify 'national' money creation above, because there is no reason that private banks or other institution cannot produce their own local money in principle.

But that's central banking, not commercial banking. very few governments own commercial banks, and those that do were as part of bailouts in the recession.

[edyle]

local banks are stable, and RBC (along with other Canadian banks) is also. private ownership per se is not the issue.

It just seems that a commercial bank can operate very well as a private concern. simply sell the shares to the public, and let the average Joe get a dividend in the event profits are made.

I could understand if for ideological reasons it should not be sold, but PP is not a socialist government.

sell shares to the public.
I wish that were so.

In practice, the average joe cannot compete with corporate investors.

This is why I say that corporations (in general) should not have the ability to purchase shares, not as corporations anyway. It is an issue of corporate personhood. They can act as middleman in the purchase, but the shares should be owned by individuals.

[edyle]

But that's central banking, not commercial banking. very few governments own commercial banks, and those that do were as part of bailouts in the recession.

Perhaps I misunderstand you, or perhaps you did not read my post.

I made no mention of central banking- well true I did mention the history of the Federal Reserve, but the issue I addressed is Private banks, and not central banks. (Of course a private central bank would pose an enormous problem.)

The North Dakota example is to point out the issue of North Dakota having it's own commercial bank, and as a result, not suffering the same demise as the rest of the states. In effect they have their own LOCAL bank who's purpose is to provide a useful service for the state to function, as opposed to a bank who's goal is merely to profit.

Perhaps by your phrase "But that's central banking, not commercial banking" you mean to refer to the issue of money CREATION?
In which case I contend that the commercial banks seem to have much and too much to do with money creation; and the profit motive biases the commercial banks to do in such a manner as to cause greater money creation, which produces inflation.

[shield_2006]

APPARENLTLy--NEL--was not inetrested?

[mammadon]

Perhaps I misunderstand you, or perhaps you did not read my post.

I made no mention of central banking- well true I did mention the history of the Federal Reserve, but the issue I addressed is Private banks, and not central banks. (Of course a private central bank would pose an enormous problem.)

The North Dakota example is to point out the issue of North Dakota having it's own commercial bank, and as a result, not suffering the same demise as the rest of the states. In effect they have their own LOCAL bank who's purpose is to provide a useful service for the state to function, as opposed to a bank who's goal is merely to profit.

Perhaps by your phrase "But that's central banking, not commercial banking" you mean to refer to the issue of money CREATION?
In which case I contend that the commercial banks seem to have much and too much to do with money creation; and the profit motive biases the commercial banks to do in such a manner as to cause greater money creation, which produces inflation.

Whilst some state-owned banks were insulated from the recession, many privately owned banks were also. If Scotia in Trini has not been adversely affected, then First Citizens can work also as a private concern. It's just commercial banking is not something a government has to provide. It cannot really be deemed a public good, can it?

If Madam Kamla and her government owned Truvalu, would it make sense? Or Royal Castle? Would they need to?

[edyle]

Whilst some state-owned banks were insulated from the recession, many privately owned banks were also. If Scotia in Trini has not been adversely affected, then First Citizens can work also as a private concern. It's just commercial banking is not something a government has to provide. It cannot really be deemed a public good, can it?

If Madam Kamla and her government owned Truvalu, would it make sense? Or Royal Castle? Would they need to?

You are correct that commercial banking is not something a government has to provide; and in the case of commercial banking there is no problem with the government owning or partly owning preferably, a commercial bank is there?

The HISTORY of the bank is also important for us to consider. Let us not disrespect the lessons of the past by disregarding it.


https://www.firstcitizenstt.com/about/history.html

History

The history of First Citizens begins as far back as the 19th Century, when activists were demanding reform and giving a voice to the working class. That movement, eventually gave rise to the Trinidad Co-operative Bank which opened its doors in 1914.

The journey continues in through to the 1930s crisis in the oil and sugar belts, the independence era and the Black Power movement, which accelerated the opening of National Commercial Bank in 1970 and the Worker's Bank in 1971.
First Citizens became successful through investment in revolutionary technology, tighter prudential credit policies, improved customer service, a development of a performance-oriented culture and talented leaders.

unfortunately the above doesn't mention the gov involvement in FCB, but what is it? isn't it 51% ? same formula as TSTT?

When the bank was down in the doldrums, who would have wanted to buy it?
But now that the bank is doing well, it would be exactly the wrong time to sell!!!! Same with TSTT. Those who have an interest in buying a successful gov owned or partly owned company will argue that the government has no business doing that.

I say, if you're so wanting to by a company owned or partly owned by the government, why not make the offer when the company is actually doing poorly.



To me it's like a real estate agent eyeing your house and trying to convince you that you should sell your house to him and instead rent an apartment from him - anywhere in the country! Yeah, why tie yourself down to one location and have to travel to work everyday! Sell the house, and rent an apartment closer to work, and if you change jobs, you can just shift over to another apartment! Why bother yourself to own your own house!






But:
having said all that, there is one reservation I have about government ownership - and I mean 100% ownership - of commercial entities, and that is COMPETITION.
It is good if the company is able to compete; but there's the danger that it may have an unfair advantage over other companies.



And since you mentioned TruValue, that's actually something I'd like to see! A government partly owned nationwide grocery/supermarket. One difference between it and the other supermarkets would be for example, you can't get cigarettes there! Don't get me wrong, I'm a smoker. Another thing you'd expect is a bias toward local produce.


You know, what bugs me too about this notion of selling FCB, is we've already seen RBTT sold back to foreign, basically rolling backwards what our predessors struggled for, and to me the notion of selling FCB would be yet another backward step.

[Redman]

sell shares to the public.
I wish that were so.

In practice, the average joe cannot compete with corporate investors.

This is why I say that corporations (in general) should not have the ability to purchase shares, not as corporations anyway. It is an issue of corporate personhood. They can act as middleman in the purchase, but the shares should be owned by individuals.

Edyle,

In a population of 1.3m tell me how you see limiting share ownership to individuals will work.

We have several mechanisms that allow for individuals to gain access to the stock market- UTC 1st scheme,pension funds mutual funds. Individuals have the same access as institutions - they use the same brokers and can place the same orders.



I generally think that that the less govt has to do business the better it is.

Now the ONLY reason that the local banks avoided the last crash was a matter of interest rate levels here vs abroad.

Our rates are at a level that makes most fixed income investments unattractive in the context of interest.

So don't believe it was savvy.it was not.

Later

[edyle]

Originally Posted by edyle
sell shares to the public.
I wish that were so.
In practice, the average joe cannot compete with corporate investors.
This is why I say that corporations (in general) should not have the ability to purchase shares, not as corporations anyway. It is an issue of corporate personhood. They can act as middleman in the purchase, but the shares should be owned by individuals.

Edyle,
In a population of 1.3m tell me how you see limiting share ownership to individuals will work.
We have several mechanisms that allow for individuals to gain access to the stock market- UTC 1st scheme,pension funds mutual funds. Individuals have the same access as institutions - they use the same brokers and can place the same orders.
I generally think that that the less govt has to do business the better it is.
Now the ONLY reason that the local banks avoided the last crash was a matter of interest rate levels here vs abroad.
Our rates are at a level that makes most fixed income investments unattractive in the context of interest.
So don't believe it was savvy.it was not.
Later

What you describe as "limiting share ownership to individuals" I am calling Corporate Personhood.
You are not disallowing Corporations from buying shares, it just has to be done in such a way that Persons own the shares.
Does that clarify?

I generally think that that the less govt has to do business the better it is.

I think you mean that you favor government non-interference, as to I.
Government has to set the rules so that there is fairness.
And the issue of Corporate Personhood is not an issue of fair competition between corporations, it is an issue of CORPORATISM, and the power of corporations over people instead of people having the power over the corporations.

Now the ONLY reason that the local banks avoided the last crash

Since there is nothing in the piece you quoted about local banks, I suspect you are referring to a statement I made about the North Dakota state bank, which I might have described as a local bank - not local to Trinidad and Tobago of course, but local to North Dakota, and created specifically in it's inception for the benefit of North Dakota. That's why it is relevant to the disscussion of FCB.

[Sirius]

Edyle if I may step into this discourse for a moment, what would the purpose be of making a person own the shares purchased by a corporation? One function of a corporation is to exist as separate legal entity, thereby reducing personal risk, not so? Why would you want to dismantle those protections? That seems like a good way to dissuade people from getting into business.

[shield_2006]

I have a question for any of you financial wizards who are dissecting the inner intricacies of this matter-

IF--National Enterprises Limited has retained earnings of in excess if TT$1 billion and the financial system is so cash awash?--how is it that this sale is apparently being developed by private treaty?--how come this is not a public offering to find a lucrative home for the excess money? how come this is not available to pension plans? what is the capitalisation of the FCB?

It is amazing what sells in this country. Does this remind anybody of the previously walked Dookeran road?

[edyle]

Edyle if I may step into this discourse for a moment, what would the purpose be of making a person own the shares purchased by a corporation? One function of a corporation is to exist as separate legal entity, thereby reducing personal risk, not so? Why would you want to dismantle those protections? That seems like a good way to dissuade people from getting into business.

what would the purpose be of making a person own the shares purchased by a corporation?

Obviously you didn't intend that to mean forcing a person to own shares; perhaps you should consider what you meant?
For example, isn't the question you are asking, "Why shouldn't a corporation own shares?"

Perhaps to answer what I think you are asking, consider the question and answer if you can:
What rights should a corporation not have that a person can have?
An obvious example would be corporations cannot vote.
I am asking everyone to consider that while we may hear and see corporations routinely buying shares and doing takeovers, we take it for granted that corporations have a right to do so, and I am saying it should not be so, at least not by default;

It might also clarify your concern if I state that while I am saying that persons must own the shares, it does not mean that the relevant person HAS TO get involved in every share transaction, he may merely sign a contract with the corporation to conduct such business on his behalf; the difference being that he would likely choose to retain the ability to keep himself out of a transaction - those details would depend on what he signs. As it stands now, it is almost as if the shareholders have agreed to give the corporations carte blanche.

One function of a corporation is to exist as separate legal entity,

Yes; but I'm not sure what that has to do with buying shares unless you are specifically talking about corporations who's PURPOSE concerns investments. That is not what I am talking about, but in that special case, the notes above explain that shareholders could for example sign as part of their shareholder agreement, a contract regarding such things even to the point of authorizing the corporation to perform carte blanche on their behalf.

[Sirius]

I suppose what I want to know is why shouldn't a corporation be allowed to trade shares?

I mention the corporation having its own separate legal identity because corporations do business as a corporation rather than as an individual all the time. That business includes buying/selling shares. What about a corporation having ownership of another corporation? To do so it has to own a percentage of the other corporation. Why should an individual be stuck with the shares? More to the point, why exactly shouldn't a corporation be allowed to do so itself?

[edyle]

I suppose what I want to know is why shouldn't a corporation be allowed to trade shares?

I mention the corporation having its own separate legal identity because corporations do business as a corporation rather than as an individual all the time. That business includes buying/selling shares. What about a corporation having ownership of another corporation? To do so it has to own a percentage of the other corporation. Why should an individual be stuck with the shares? More to the point, why exactly shouldn't a corporation be allowed to do so itself?

QUESTION:
Why shouldn't a corporation be allowed to trade shares:
Corporations, IN GENERAL, should not just have the right to buy shares by default, as if the corporations was a person.
I just want to get that point accross first of all, that it is not a matter of corporations not being able to trade or appear to trade shares at all, but that there is an underlying way to do it.
ANSWER: the issue is Corporate Personhood. A person can buy shares. A person can buy land. In a Republic, the persons are the sovereign entities.
Corporations are artificial contructs formed for a useful purpose. A corporation can resemble one very powerfull and wealthy person. What would happen if large corporation could just start buying up land all over Trinidad and Tobago, not for any purpose other that to own the land, and therefore become a monopoly on renting out the same land?

I found something that relates to what I'm talking about as applied in the USA, it doesn't really explain much like what examples there are of S Corporations, but the point I'm making with the below quote, it that the issue I am talking about is recognised in some jurisdictions:

http://www.ehow.com/info_8116517_can-buy-shares.html

Nationality

• A C corporation has no limitations on which individuals or organizations can own its stock. For this reason, investors in China, Argentina, Italy or anywhere else in the world can buy and own stock shares in a C corporation headquartered in the U.S. An S corporation, however, has a number of limitations on who can buy its shares, and one of these limitations is based on nationality. To have an S corporation tax status in the U.S., an S corporation must be located in the U.S., and all of its shareholders must be U.S. citizens, U.S. nationals or resident aliens. Nonresident aliens cannot own shares of an S corporation.
  
  

Type of Entity

• Just as people all over the world can buy a C corporation's stock, buyers do not need to be people to do so: Other companies may buy a C corporation's stock as well. However, the owners of an S corporation usually must be individuals: C corporations, LLCs, partnerships and other S corporations cannot purchase S corporation shares. The only exception is if the LLC is a single-owner LLC: If an LLC has only one owner, it may own some or all of the stocks in an S corporation.
  
  
  

Read more: Who Can Buy Shares? | eHow.com http://www.ehow.com/info_8116517_can...#ixzz24Q81mVqb

[Redman]

S corporations limit the shareholding because s corps allow the income of the corporation to pass through for taxation purposes.
Therefore the owners have to be taxable entities in the US.
Hence the limitation.
an s Corp is a special purpose vehicle.

in Tdad the institutions that own shares are owned by individuals directly or indirectly.
Ed I'm trying to understand where you are coming from.
Can you expand on what you're saying.

Later

[edyle]

S corporations limit the shareholding because s corps allow the income of the corporation to pass through for taxation purposes.
Therefore the owners have to be taxable entities in the US.
Hence the limitation.
an s Corp is a special purpose vehicle.

in Tdad the institutions that own shares are owned by individuals directly or indirectly.
Ed I'm trying to understand where you are coming from.
Can you expand on what you're saying.

Later

Well, for one thing, I wish I knew what the laws were in T&T with regard to Corporations and such artificially contructed entities buying shares (and real estate too as a matter of fact).

We see for example there is the differentiation in the US between S and C classified corporations and it would be interesting to understand some examples of such.

I've actually forgotten how I drifted towards this tangential issue with regard to the subject of the thread which is about FCB specifically.