To take a loan or not, that is the question
 

Naturally, Shakespeare had a lot of points to make about society, the condition of mankind and the like, back in those days which I can only assume were based on the principles of Usury.

I imagine (not being around at that time) that he highlighted a couple of extremes within "neither a borrower nor a lender be" in order to generate thought among his audience.
In this day and age I would expect people to live within their means; in simple terms, certainly take out a loan but only on the basis that you can afford the terms and conditions and can repay the loan (+ the interest of course, if you have not used an Islamic bank).

A good idea? - Domestic issue
 

There is another "live now, pay later" scheme here in the UK which is related to the provision and use of household energy.
This has come into being because people are not investing their hard earned income into capital expenditure on insulating their property (and other similar energy saving schemes but I am no expert in what they are).

So, what the Government want to encourage is that householders install the energy saving systems and pay for it via their future energy bills; in theory the bill for energy usage is reduced by the installation so the customer does not "notice" the portion of their bill which is contracted to repay the capital expenditure - i.e. there is no up-front payment.
Paying off the scheme will probably be over 20-25 years.

A "catch" in this, is that when a property is sold, the repayments "stay with the electricity meter". In other words a future purchaser of such a property inherits the liability to continue to pay for the installation; that's neat.

No one has explained in this news item if the banks are involved in the financing/administration of this scheme, or if it is executed via some government agency/quango.

?c?

Insider trading
 

There are a lot of people here in the UK who would not agree that the old boys network in the UK was eliminated by the de-regulation of the markets, including the stock market.
Old boy networks don't have to be based on the "traditional toffy-nosed posh boy", to mis-quote one of our members of Parliament.
Surely, insider trading relies on a network, old boys or not?

I can accept that the USA may be different but it does seem to be the centre (center!) of the world for conspiracy theories.

These sectors of banking activity were far from separate from each other in the UK, witness all the effort now being made here to separate the retail and investment operations of the various brands of bank; firewalls (not the computer version) etc have been proposed but we are sorting out legislation to stop the investment bankers from bank-rolling their bets with the deposits of retail customers.
The pity is that the banks have convinced the government to take a lot of time over this.

?c?

Haaa!
 

The UK Chancellor of the Exchequer during a TV interview has just referred to "the gamble on the city of London over the past 15 years", or words to that effect.
This was in the context of future capital investment in transport for the UK (HS2 if anyone cares enough).

Someone up above says "I would like to think that this thread will be of some use to the youthful individuals among us - including those who come to view this in the future....."
Well, by the time I've read this far, I've lost track of who said what to whom about what in response to which posting.
But it's certainly entertaining, what the bar's for, so here goes....
Mine's a pint of sarsaparilla bier

While agreeing that there are good and bad in all professions, it seems to me that the de-regulation of the finance industry in the 70s/80s allowed those bankers with greed as their main motivation to completely swamp the honest professionalism of the rest. The UK government at the time were warned of exactly this possibility, but warning Maggie Thatcher of 'unintended consequences' was not fashionable in any part of society and was rumoured to be a hanging offence. It's not for nothing that the moniker "SWMBO" entered just about every language on earth.
(Yes, I'll be at Trafalgar Square the first Saturday).

It became so bad that a whole country's complete banking system collapsed, a timely reminder on today's BBC news:
BBC News - Icesave: Icelandic government wins compensation ruling
"Icesave, run by the Icelandic Landsbanki, collapsed in 2008 along with all of Iceland's banking system."
I don't think any western country has ever had a complete collapse of, say, health care, energy distribution, education, police etc.

As far as I know, no other profession was stripped of so much basic regulation, checks and balances, as the finance industry. And human nature being what it is, we see the results today.
Yes, 'regulators' were appointed and put in place, by the government. Expensive and useless, it's taken a few years for the FSA to lie down and die at last. Will anything else do a better job?
Probably not. Governments these days are controlled by a huge lobby industry, one of the fastest-growing industries I think. And who has the cash to pour into that industry? The bailed-out banking industry.
Like a daisy-chain?

I would ask, if the banking industry is so fundamental to the well-being of humankind within our current system of capitalism and eternal consumer growth (and I think it is), why isn't it one of the most tightly regulated industries?
Like, say, the nuclear industry, civil engineering (or any other engineering), medicine, and air transport?
It seems that no other chain-reaction misdemeanour (committed by however few people) in any other major profession has touched the lives of so many people worldwide. Perhaps the tobacco industry, and the foreign policies of large countries, get close.

Don't get me started on this new pile of corruption... Oh, you already did!

"Approved Green Deal installers, such as energy companies or DIY chains, will then advise [the householders] on potential improvements, such as double-glazing, insulation or new heating systems."
So, those advisors, "energy companies" and "DIY chains" will really operate in the interests of the householders, won't they.....?

"Consumers will pay for the improvements by taking out a loan with the Green Deal Finance Company, a non-profit making organisation backed by the government."
"There is no guarantee that the eventual savings made by consumers will match the cost of the loans they take out to make the improvements."

Ladies and Gents, I give you the "Green Deal Finance Company" :clap:
Performing with the "Advisors to the Company"
Clifford Chance
Goldman Sachs International
Linklaters
Lloyds TSB
PwC
RBC

Yes Ladies and Gents, there are indeed banks of differing skills on the stage, ready to sell their advice.

This is a company making loans to householders in energy-inefficient homes, having difficulty paying their gas bills.
It's non-profit making. Why does it need such a glittering array of 'advisors'?
The advisors above?
Oh, I forgot. This has been set up by the government. So a good sprinkling of MPs, Special Advisors and senior civil servants with plenty of interests in those 6 companies, then.

Another disaster waiting to happen. No one in the whole operation is regulated to operate solely in the householder's interest.

A4E anyone? http://www.guardian.co.uk/politics/2012/feb/21/emma-harrison-a4e-nice-work
and https://en.wikipedia.org/wiki/Emma_Harrison_(entrepreneur)

Another sarsaparilla please bier

"Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon." - Churchill

It would be silly to suggest that there haven't been abuses. But those simply do not rest SOLELY on the shoulders of bankers.

Regulators, (Home/Propety) Appraisers, and borrowers are surely complicit. In fact, in the run-up in the mortgage debacles there clearly was a symbiotic relationship. Fools were flipping houses to make a quick profit and it was all good until the music stopped.

Have a read of Michael Lewis' wonderful books - 'The Big Short' and 'Boomerang: Travels in the New Third World'.

In the first he bares witness to the fact that almost NO ONE understood the CDO/CDS and a particular Deutsche Bank trader went from full bull to full bear on the whole game, much to the incredulity of his peers, his employers, and two other parties who'd figured out that the emperor had no clothes. In essenece, when everyone was making money, no one could stop or at least didn't believe the music would stop without them having a chair (musical chairs).

If an Art History major, even one from Princeton, can figure this out . . . it's not rocket science. (Granted, some sections of 'The Big Short' are a bit mathematical.)

In the second, he examines, with pithy irony, "beware of Greeks bearing bonds" and how various populations (Greece, Ireland, Germany, etc) behaved when the money was there for the taking.

As for the whole CDO/CDS . . . go back to '98 when an intrepid Brooksley Born raised in investigation into the entire market of CDSs. She was effectively shot down by Alan Greenspan, Larry (Lawrence) Summers, and Arthur Levitt (head of the SEC). At that time the market was in the mid-100 $Billions. By 2008 it had increased to an estimated 56 $Trillion, one year of TOTAL global economic output.

That enormous leverage, and it's lack or regulation, gave forth to ENORMOUS counter-party risk.

So . . . back to "bankers". AIG, an enormously successful company of over 100,000 employees was brought to it's knees by about 1,000 folks in London of whom perhaps 40 were directly responsible.

Too much money chasing too few assets - asset bubble. The "chasers" - borrowers, appraisers, credit rating agencies, regulators . . . and some bankers.

Banking in, and on, Iceland
 

There are a lot of well made points in the post, and one of the most interesting is the reference to what has occurred in Iceland.
As I understand this (from news coverage and the occasional documentary) the Icelandic nation decided to "get into" international investment banking - a case of chasing the asset bubble referenced elsewhere in here?
So Iceland jumped in with both feet with a lack of background in this activity/service sector, call it what you will.
I well remember at that time the full page advertisements in the UK newspapers for 2-3 Iceland based banks which offered depositors an interest rate of 12% or more; I was tempted, as I am sure many others were, to deposit some cash but this just smelt too good to be true (and we all know the ending of that motto).
But, here's the interesting bit: I believe the Icelandic case is unique (in the way explained in the news article in the link) in that their Government decided to allow the banks to fail. Contrast this with the bail-out by every (to be confirmed by someone) other nation.
On the face of it, this sounds good news but the people of Iceland may not agree: at present they are paying interest rates way above those low rates that exist at present in the UK and elsewhere; in other words, their internal banking system (now they have withdrawn from the international experiment) is not trusted and cannot borrow money on the international markets at cheap rates - the net result is that families are having to pass on their debts to their children in dealing with mortgages that extend way past the lifespan of any single individual.
Perhaps a native of Iceland can add value to this understanding of what is happening with their country at present?

The comment within the linked article by a journalist says:-
A ruling from the little known EFTA court has put a fundamental objective of European idealists in doubt; that banks should be able to offer savings accounts to customers across Europe and that customers, in turn, should be confident that their deposits will be protected......................
In other words, it will take some time for the Iceland banks to be trusted again by anyone outside Iceland; how long though? Memories are short.

The question begs ........
 

Where is the safest place to put your cash where the best interest can be earnt ? ?c?

Well, therein lies the rub; how much risk do you really want to take?
Could you open an account in Iceland while visiting there to earn their higher rate of interest?
A Swiss numbered bank account (which have a very small rate of interest I understand, but are considered to be very "safe").

This guy came up with an answer, if you read into why he has done what he has done so far (as a multi-millionaire business man who got very frustrated with the UK retail/commercial banks):-
Your Savings | Burnley Savings and Loans

In the meantime, interest rates here in the UK are falling for no obvious reason; so, they are going from small to very small - of course, the government wants us all to spend so that they get increased tax revenue, but we are all waiting for prices to fall further.
Actually for "no obvious reason" = it is likely that interest rates fall because there is a "cash bubble", like an asset bubble; lots of companies in the UK are sitting on cash deposits but they don't have enough confidence in the economy to want to invest it.

Japan was mentioned earlier: they have been in a state of stagflation (stagnation of the economy coupled with deflation) for more than two decades.

As a follow up to how banking is progressing in democratic Iceland (multiple referenda) here is another case study which is ongoing (non stable and non democratic).
New Kabul Bank - Wikipedia, the free encyclopedia

Afghan elite ransacked $900m from Kabul Bank, inquiry finds | World news | guardian.co.uk

Consider who is ripping off who.

Incidentally, a news item stated today that Honduras is in financial meltdown.

However when a bank customer screws up there is a fee, when a bank screws up there is none (well not really anyway). And when most/all financial institutions act in a similar/identical way, do we really have a choice? (note: I cannot comment on local/regional small banks, you may have a good one? I don't know)

The fees are where the banks are now making big money. However due to low interest rates, depositors (mostly responsible Middle/working Class people)are loosing money everyday their money is in a bank. (albeit low risk mind you) Wages are not going up, prices are. Inflation is based on cost of living and wages. The way to mask inflation over the short term is to depress wages. Wages for the lower 95% are being depressed worldwide.

The easy blame is on the China/Asia region, when in fact it is the multinational banks. No, many smaller banks do not fit this mold. Contrary, many USA banks (my country) are the queen of this, and London is the King(due to slightly less regulations, same corporations though).



Should we keep money in our mattresses? Technology is getting cheaper by the day, but it is not the type of technology that lowers the costs of the necessities to live. This post is getting too long, and conviluded... Ask me about price vs value when I am truly drunk, it's fun beer

"But you have no right to demand other banks or bankers behave in a way that you personally or even the majority of the population see fit."

I find this statement quite bizarre. People demand all sorts of behaviors out of me all day long: that I do certain things and not others at traffic lights, that I refrain from killing or seriously maiming my blameless fellow citizens, that I act in certain ways when dealing with contracts, money, possessions, manner of dress, etc. etc. etc.

For example, I'm forbidden, under penalty of law, to defraud other people, institutions, or the government. "Fraud" is defined in various ways for various situations--in my professional work I'm actually required to conform to a fairly strict definition of acceptable behaviors. So are auto mechanics. So are lawyers. And like it or not, so are bankers.

To claim otherwise--that no one can impose rules restricting the behaviors of bankers--just doesn't make sense...unless, of course, you're a pure anarchist, who believes that no one has any right to limit any behavior but their own under any circumstances. If that's the case, I respectfully decline to engage any further.

Mark

In fact, some banks are better than others, and if you can't be bothered to find the good ones and move your money to them, then you are just being lazy. I currently have money in a handful of banks, and if their service fails to impress, I transfer my money to another one and close the account. While I can't say that I have found the perfect bank yet, I at least try to reward good banks with more deposits and penalize bad ones by closing accounts. If you act like all banks all the same and do business with bad banks, you are part of the problem...

Not sure where to start here, because it is not clear what you are saying--you are blaming banks for paying low interest rates? Or for depressing wages? Or both? How do you mask inflation by depressing wages?

I think the convoluted nature and size of this thread shows clearly the universal nature of banking and the wide impact that it has on everyone.

Perhaps the moderators for the bar conversation would make this a sticky; otherwise when this thread does come to an end (but probably not any firm conclusions) it will disappear; as I said earlier, there is some serious education in here for us.
"If you think education is expensive, try ignorance".

i can't quite face reading back through all the previous history , but I do know one thing
They (a bank) pay my wages and have let me take a year out to do my planned world trip.. - And no I don't get big bonuses and they pay me the going rate for my job.

High ranking big cheeses in any company are the one's who get the big buks £million pay offs, and such like - Industry is full of them. Football is full of them .

Every company out there wants to make big profits for their shareholders, with customer satisfaction coming secondary to that primary goal.

Banks are no worse than any other industry you are to mention.