Should we pay for banking

the goverment could have kept the privatized bank to force other banks to always offer free accounts and competitive rates...

pitty they just sold it.

now if we only had a priatized eletric company forcing other suppliers to actually be competitive....
 
If there was a free market in banking and the government did not prevent competition and encourage the monopolies. Then it is feasible that the banks could even pay the customers money to actually store money in their bank (yes unbelievable i know). But what would probably develop is a risk based banking system.

Where a bank would offer two types of accounts, a low risk and a high risk. The low risk might cost a bit of money a month and you would be sure that your money is not being used by the bank to invest in CDS or other fraudulent financial instruments. It is likely that these types of accounts would also offer high interest and could be free as well, especially if you have limited services on your account.

The other type of account would be a high risk one where you invest your money in the bank and the bank can use your money to make loans and invest in other ventures. Of course they should always have it available if you want it (very similar to todays accounts but with more benefits for the customer). These types of accounts will probably come with a high interest return for the customer due to the risk.

At the moment it is completely distorted, the banks give out no interest and demand high interest on loans and credit cards etc. They offer one type of risk account, ultra high risk. Once you put your money in to the bank it is not yours any more. The banks can do what they want with it and they can go bankrupt and you can lose all your money. So with the help of the government the banks have created a nice situation for themselves where it is a win win situation and a lose lose situation for their customers.

No amount of government regulations can fix this problem, what can fix it is REAL banking competition and currency competition. But the banking monopolies practically control the state and they have for 100s of years. The government does not have any power over the banks, this is one of the reasons why regulations are fruitless. They need market mechanisms to kick them out.
 
Last edited:
First of all groen, most money is stored in savings accounts and not current accounts. A tiny proportion of wealth is at risk in current accounts.

Secondly, zero risk savings accounts do exist. It's called cash.

Thirdly, when you put cash into a company you are investing in the ability of the company to pay you back 3% interest. Not on anything else. Money isn't earmarked. If a deposit insurance scheme didn't exist, it would be like a corporate bond.

edit:

when i say zero risk i mean zero nominal risk.
 
Last edited:
Personally, I'd rather not have a bank account. I only use it for my wage and online shopping. I don't really see much of a benefit, even the reward credit cards seem too much hard work for what they are worth.I'd rather the cash direct, untouchable, fee-free and all the nosey bar-stools have no idea on my business :)
 
I thought it was quite shocking that Richard Branson was not allowed to create a bank instead he was forced to buy a failed bank. Good luck to him and I will definitely be moving over my current and savings account to his bank.
 
Jakeee said:
Personally, I'd rather not have a bank account. I only use it for my wage and online shopping. I don't really see much of a benefit, even the reward credit cards seem too much hard work for what they are worth.I'd rather the cash direct, untouchable, fee-free and all the nosey bar-stools have no idea on my business :)
Click to expand...

If you were given £500,000.00 would you not put it into a bank or would you hide it in the house?!
 
koolpc said:
If you were given £500,000.00 would you not put it into a bank or would you hide it in the house?!
Click to expand...

Savings wise, I would much rather that sort of cash disappear into my belongings than in a bank. That doesn't mean, hiding it under my bed though ;) The way I see it, all we are to banks and government is money, ranked by credit history and income. The less they know about me, my money and business . . . the better. (This doesn't mean fraud, just privacy). All the taxing, fees and insurances in this country is a joke.

I would rather managed my money and invest into private business than save it in a bank or ISA.
 
Last edited:
TheDean said:
I see no need to pay any fees whatsoever. Infact, I was paid £100 to move to my current bank!
Click to expand...

They only pay you that because they then pay you no interest and expect to be able to cross sell you a mortgage or a loan or car insurance or a beach holiday or a timeshare or a packet of chewing gum.
 
So the banks are now blaming their customers for demanding free accounts for the crisis. Jeeze it just gets more and more bizarre.
Everyone knows the crisis happened because banks were lending people money they never had.
 
jas72 said:
So the banks are now blaming their customers for demanding free accounts for the crisis. Jeeze it just gets more and more bizarre.
Everyone knows the crisis happened because banks were lending people money they never had.
Click to expand...

Banks have always lent people money they never had, and always will do. There's an argument to be made that they were too strongly leveraged, but I'm not sure one way or the other, which is to say I literally don't know.
 
I pay a monthly fee (£7), but in fairness that gives me the same interest free overdraft I had as a student (in the order of thousands, not that I use it, but it's nice to have), free world-wide mobile phone insurance (Orange wanted £6.70 a month just for UK cover), and free RAC breakdown cover that would normally cost £60 per year.

So all told, it's cheaper for me to pay them the £7 than to pay for the other stuff separately, and I get an interest free overdraft.

No brainer really :)
 
Malc said:
I haven't read the article, but we shouldn't be forced to pay for bank accounts, without people depositing money in to the banks they wouldn't be able to loan out money and in turn make money.

By having a bank account in credit, you are enabling that particular bank to make money through loans (and with banking in it's current form, with a massive amount of leverage). By having a bank account in debt or having a loan you are paying the bank interest and allowing them to make money. Within that situation, the banks should be smart enough to make a profit as a whole without the need to charge a set monthly fee.
Click to expand...

Malc virtually zero loans are made from people's deposits. Most loans are created out of nothing in the "hope" that they are paid back, this is how money is created and modern economies grow.
 
You must log in or register to reply here.
Back
Top Bottom