#Banks …not passing GO! – just yet..

From No More Excuses

Rounding up the strays..

It has taken a long time, and the cynic rightly can say that they were pushed into doing it. Either way it was going to happen, be it by this Government or the next – or probably worse, by Europe…which is going to clamp down anyway! Nevertheless, a report by the Parliamentary Commission on Banking Standards has still had its critics. Primarily from the banking sector and die-hards whom have never had it so good! Set up to investigate the LIBOR scandal, it pretty well has enveloped the ails of ‘banking’ in general – let’s face it… it would be hard not to!

The simple answer however, and this has taken over a year to bring together, is not exactly that simple. It is a good promissory band-aid for those demanding blood and at the very least ‘Stocks’ at every corner of the square mile. Form an orderly queue please!!

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The problem 

Too many bankers, especially at the most senior levels, have operated in an environment with insufficient personal responsibility. Top bankers dodged accountability for failings on their watch by claiming ignorance or hiding behind collective decision-making. They then faced little realistic prospect of financial penalties or more serious sanctions commensurate with the severity of the failures with which they were associated. Individual incentives have not been consistent with high collective standards, often the opposite.” – to quote the Committee’s report, actually sounds quite tame considering the length and breath of their considerations.

It is though, in my view, pound for pound very logical. Moderated by some of the press from the embargoed release, yet pounced upon elsewhere. This quote [below] however sets the tone;

“Banks in the UK have failed in many respects. They have failed taxpayers, who had to bail out a number of banks including some major institutions, with a cash outlay peaking at £133 billion, equivalent to more than £2,000 for every person in the UK. They have failed many retail customers, with widespread product mis-selling. They have failed their own shareholders, by delivering poor long-term returns and destroying shareholder value. They have failed in their basic function to finance economic growth, with businesses unable to obtain the loans that they need at an acceptable price. ”

Ultimately, they did reach various conclusions on how it is perceived how matters should proceed. Phrased as such the whole is more likely to be received in the ‘House’ with full cross-party support. In many ways, I’d love to see much – if not all of this – made retrospective for all those whom have been so cruelly wronged by those and their actions, and for the domino effects it has had . However this snap-shot of their thinking – particularly the latter which attracted the headlines – is a move in the right direction.

“The Commission envisages a new approach to sanctions and enforcement against individuals:

  • all key responsibilities within a bank must be assigned to a specific, senior individual. Even when responsibilities are delegated, or subject to collective decision making, that responsibility will remain with the designated individual;
  • the attribution of individual responsibility will, for the first time, provide for the full use of the range of civil powers that regulators already have to sanction individuals. These include fines, restrictions on responsibilities and a ban from the industry;
  • the scope of the new licensing regime will ensure that all those who can do serious harm are subject to the full range of civil enforcement powers. This is a broader group than those to whom those powers currently extend;
  • in a case of failure leading to successful enforcement action against a firm, there will be a requirement on relevant Senior Persons to demonstrate that they took all reasonable steps to prevent or mitigate the effects of a specified failing. Those unable to do so would face possible individual enforcement action, switching the burden of proof away from the regulators; and
  • a criminal offence will be established applying to Senior Persons carrying out their professional responsibilities in a reckless manner, which may carry a prison sentence; following a conviction, the remuneration received by an individual during the period of reckless behaviour should be recoverable through separate civil proceedings.”

For the full report, and it is worth reading even though lengthy. Here is the link. Parliamentary Commission on Banking Standards – Fifth Report. Changing banking for good.

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Easy Money’

There’s no such thing…

The report has covered virtually all the evils of recent years, and looks towards the future such as portability. Basically matters which have been broached by Basel I, II, III. In themselves weighty tomes and caused much disapproval from the banking sector. Quite honestly, tough. These changes slowly being effected across Europe will make Banks stronger, but more importantly safer for the general public. There is one thing I would still advocate irrespective of all this.

Quite simply there is and will always be a need for a Basic Bank Account available for all. This report – although not mentioning it directly – brings this closer. Already many banks are realising this with some introducing varied types. If there is to be a restorative feeling towards ‘Banks’, the report in itself is no panacea. It does though point towards getting it right, and that will take time.

A major realisation will be the splitting of the banks into retail and investment.

Regardless of this though are those still bitter memories of the frauds allegedly [required] committed by those who rigged the Libor rate. It affected everybody and virtually every product on the market. Quite unbelievable. As were the shenanigans of the RBS. Committed in the investment arm of banking yet using the ‘whole’ to back up its mis-judgements. The act of Governments to bail-out this…AND reward failure with commendations, bending over backwards to accommodate such, leaves a very sour taste in the mouth. In mine and those who still believe in values and honesty.

What however cannot be accounted for is, indeed are, the woeful and multi-various forms of economics employed by Governments worldwide. Add that to self-defeating exercises in accountancy domestically, it is no small wonder we are where we are.

As a ‘bean-counter’ myself, this is painful. And I like to consider myself one the good guys!

One thing being addressed but under different banners are the mindless idiocies of Pay-Day Loans. If Usury isn’t brought back to statute I’ll be astounded. And yes, you can blame the attitude and happenings of banks for this to accumulate at the speed it has.

Not that there aren’t other factors involved, of course, but one thing sparks another. AND this isn’t a new phenomenon, all that’s happened is the ‘Loan-Shark’ has grown up so to speak. The original still exist, just at a lower and more menacing level. Some operate under every day household names, get featured on TV for dubious tactics…YET STILL… are permitted to ply their trade.

Selling off the family silver as we did, still do… never was the answer, never will be. Likewise, bailing out banks and to sell them back, again, at a loss, is plain bonkers. Sure new investors would love it, it’s a bargain! Not though for the original investors or the public purse. Wake up Britain! Wake up Chancellor, whatever your political colour!! First, bring these recommendations in as soon as possible in this session or next. Do not water them down. Last chance saloon, again, it appears!

#CAB ‘…a cunning plan?!’ Curious thing Banks..!

From No More Excuses

Well there’s a funny thing..

What struck me recently was something ‘..Out Of The Blue’, not the well known revue my late Mother starred in, but an idea from the very bastion of impartial advice the whole of the UK respects without question.  No, not Which? the other lot… ‘Our’ Citizens Advice Bureau.

And I say ‘Our’ with a fond affection to all those who give their time effort and in many cases, their own money to offer what is the first line of help and defence against anything and everything rogue this country has to offer. The guys on the front line really don’t know what each day will bring, it literally could be anything.

But getting good advice is one thing. You need impartiality to hopefully help people back from despair, or at least to provide stability via their own commitment and pointing in the right direction.

So when they, raise the subject of  banks – a subject very dear to my heart – I tend to read it with the devout intensity of a preying mantis. This though came as a little bit of a surprise, and not just to me!

Just in passing…

One thing all of us have in common – in this battleground of the impoverished – is that we want the banks at last to begin to recognise the importance of providing the most basic of bank accounts. No need to rant on this, save of mentioning again that the trials now in progress by the Bank of Ireland, introducing three new accounts could prove a boon to many, solely for the reason that it extends access to thousands across the UK hitherto removed from day to day banking.

In it’s own right, I find it rather ironic that the very home of what was the National Savings on the High Street, the Post Office, could see an upswing in volume traffic – amongst other things – somewhat of a return to the day of saving stamps and the ‘PO’ account of childhood memories. For latter-day devotees not so ancient,  harken back to the Girobank. Sold off to the Alliance & Leicester now part of Santander.

Then of course there are the ambitions of the Credit Unions to bring the ethos of regular saving with, if needed, small personal loans to members. Micro loans – if you wish – something which could end the monopoly of the ever increasing plague of Pay-Day loans and their infuriating interest rates (which should be made illegal by bringing back Usury), also at one stage rumoured to utilise the Post Office network.

Sad, so very sad, that so many were closed across the UK.

A Rather Consuming Interest..

However, more pertinent  to good advice is not to send people off to a particular bank or institution for one/a particular product. All I/we can do is illustrate the merits of each, more guidance than advice as no recompense is sought or gained. What can’t be done is to advise banks on what each particular type of account should carry as part of its individual  ‘…charm’.

So for many reasons I chuckled when I read a blog/missive from the desk of the CAB. For there are very sound reasons why this wouldn’t pass muster, well at least in my book. In that I chuckled really isn’t true, it was more of a grimace with a curled lip.

Reminded though I was about the miscreant failings of banks in recent years neatly linked to the up and coming changes across the industry, I’m still not convinced that this light-bulb moment, hasn’t been devoured by the institutions before. In fact it has.

Why therefore do we have all these so called products available in the retail areas of each branch/online/call centres. The introduction of packaged accounts bristling with so-called goodies is the very meat of today’s banking, simply because it produces a better return to banks concerned.

Remember when you went – cap in hand – pleading for a loan to buy the car/or whatever, our/your friendly bank manager sat there drooling all over your file weighing up the pro’s and con’s of those awful purchases ‘you’ made last year. Are you a safe risk…? Well wasn’t that the information now so wanting to be packaged up and sold?!

Ok, upgrade a few years to today’s high-tech evils, the real question is do we really want these minutiae of details to be flogged off to the highest bidder?? Bluntly, NO!

I’ll tender the fact that as consumers we’ve all been blustered and blundered into purchases by virtue of this very ploy. From the humble tea-bag upwards.

Now…let the banks use the information – our information- for a profit! Good grief, give me a penny for every time someone has tried to get information out of them when needed? And forgive my cynicism when there’s a remote chance that this ‘moot’ has already been trialled.

One step too far…

Primarily, how can/could one bank operate a comparison site when others didn’t and by the same token, would it want another bank to even think about hitting on what they would perceive as ‘their’ territory.

Within that concept, do you apply the idea to all accounts, or just to fee-based accounts. (Think latter).

Then again there are already existing comparison sites for all manner of ‘STUFF‘ and all bend over backwards to prove their impartiality. (Don’t forget, they get their ‘finders fee’ too).

Banks per se are individual beasts, if you were. They only like selling their products to their customers. Stamp it with their logo and it becomes ‘..the brand’ maximising what’s left of their loyalty base. An advertising and marketing nightmare in itself.

Then of course, having said that…how could any one bank be that impartial?! […product wise of course!] In that this could  predominately link itself to the energy part of the Utilities market raises more than an eyebrow of discontent.

This list however  suggests our daily usage from phone to television, travel to energy could be covered even by the setting up of separate ‘saving accounts’ to amass the benefits. Get the best deals and bag the savings. Great, but all your accounts become one for purposes of consolidation when your loan, mortgage, overdraft become due and outstanding. Awkward.

If for some reason the minefield of the Data Protection Act doesn’t preclude this chummy inter-alien sharing pound-fest to take place, don’t ring me. It thus becomes a product, another product for a select and very few punters only. Can we just get the basics sorted first.

Ah! But….

On the other side of the coin, it does seem very reasonable for the CAB to proffer this. It is after all only a suggestion. But I haven’t come to ‘…bury Caesar’ far from it.

Take this message/update from the same good offices, 10th May 2013, it bears good news with a cautioned approach. Something  which at last gives some hope to answering the call for a basic bank account revival. But it still hasn’t silenced the detractors of this world. It does however illustrate just how hard it has been for all campaigners in this effort. From what was a brick wall basically built of continual refusals, some light is now shining.

All this as the banks, their cohorts, legions, their beloved association the BBA have fought and tooth and nail to resist this. To big to fail but of course we are to shoulder the blame.

So a ‘Hat-Tip’ is in order. The CAB should be braided into a seasonal and daily accolade of unlimited praise. Therefore, can we take the lapse into product development as a figurative doodle over a cup of strong tea, it confuses the picture – a bit.

Before you go…

Having mentioned energy, albeit fleetingly, could anyone who has encountered difficulties with the energy plan Heatwise and getting the meter removed, like to contact me. You’re likely to be in the Midlands in a relatively new…new build property. Most probably you’re finding that the summer bills are staggering, as well as the estimates.

There is a strong possibility of returning/getting a standard/Economy7 meter installed. Please contact me via Twitter in the first instance by following. Sadly there aren’t/can’t be, any template letter solutions in this instance. But in short, yes, it can be done. However, there are no guarantees as everyone is different as you’ll appreciate.