On the ‘free banking myth’

May 24th, 2012 § 0 comments

Free banking. There is no such thing. It’s more akin to the NHS – free at the point of use.


Free banking is “a dangerous myth”, according a top Bank of England official.

The comments come from Andrew Bailey, who is due to become the chief regulator of the financial services industry in July.

He says customers may think their account is free, but the true costs are actually hidden.

Those hidden costs would include the extremely low interest rate that many banks offer on current accounts.

Due to the nature of a current account, it should be free. A current account is not for saving, it’s not an investment, it isn’t money for taking risks with. It is an account for doing daily business with.

So much of our daily financial transactions are electronic that without a current account you’re practically outside society without one. It is one of those things that, without one, so many things are shut off.

Businesses and banks, for decades have been pushing people to get accounts. How many people get paid in cash, in an envelope at the end of the week or month? Not a part jobs, in pubs or whatever, but proper 40 hour a week jobs? I couldn’t get paid in cash even if I wanted to, and practically nobody else could either. So if I’m not allowed to be paid in cash, why should I have to pay a bank to be able to receive my wages?

If I overdraw, fair enough, I should have to pay a penalty. The cost should be may seem high, £25 for a computer generated letter telling me I have no money may feel rather insulting, but then I can do several things: Sort myself out so I don’t overdraw; get an agreed overdraft which would cost a lot less or; move to a bank that charges less for a letter. To be charged for being able to access and manage my money when I have no choice, that is the real insult.

“In short, I think that the reform of retail banking in this country cannot move ahead unless we tackle the issue of free in-credit banking, and have a much better sense of what we are paying for and how we are paying,” Mr Bailey said in a speech.

You want me to have the account. As long as I’m only using my money, you take the cost of it.

He said the situation also made it difficult for banks to understand the cost of the services they provide, which may have contributed to the mis-selling of financial products.

Between them, Barclays, Lloyds, Royal Bank of Scotland and HSBC are currently paying about £9bn in compensation for mis-selling loan insurance.

“I worry also that this unclear picture may have encouraged the mis-selling of products that is now causing so much trouble,” Mr Bailey said.

It’s difficult for the provider of a virtually madatory service to understand it’s cost? Aw, diddums. Is there anything these fucking wankers do understand? Most of them cunts in The City don’t understand half of the products they trade. Selling debt and other stuff in ways that are so fucking difficult to understand they didn’t realise how fucked the whole system is until it all came crashing down on top of them, and us.

If you don’t understand what you’re doing, you’re doing it wrong.

And it may have contributed to mis-selling? I don’t buy that for a fucking second. The mis-selling happened because they wanted to make money and to tell everyone they needed loan insurance was the easiest and quickest way they could make money. If they did it deliberately, they thought they could get away with it. If they didn’t do it deliberately, they obviously didn’t know what they were doing and shouldn’t have been doing it. Either way they were being cuntish. Fuck ’em.

However, Mr Bailey says it is a difficult situation for banks because the first one to start charging for accounts could lose significant amounts of business.

Speaking on the BBC’s Today programme, BBC Business Editor Robert Peston said: “He’s saying you can’t leave it to the banks to clean-up their act in this way.”

We’ve learnt over the last few years that the banks can’t be left alone to do pretty much anything.

“That’s why he is saying – which I think is really pretty significant because this chap is replacing Hector Sands as the senior regulator in the City of London – that either the regulators or the government actually have to intervene to end the myth of free banking.”

Charge me for having a savings account, ISA’s, being overdrawn or whatever, but start charging for current accounts, the banks can get to fuck.


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