Banking threat?

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evenasus
evenasus Posts: 11,861 Forumite
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in Savings & investments
I was browsing the Discussion Time board and came across this post.

http://forums.moneysavingexpert.com/showthread.php?t=5024794

Scaremongering, do you think?
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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Banking as we are know it is undergoing fundamental change. All the knocks that the banks are getting will ultimately result in the loss of free current account banking. As what gets taken away will have to be replaced.
  • colsten
    colsten Posts: 17,597 Forumite
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    There is nothing more to add than already posted over there:
    dodger1 wrote: »
    That is nothing more than scaremongering by goldcore who are a company who deal in gold and want your money. Just ignore them.
  • jimjames
    jimjames Posts: 17,619 Forumite
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    Definite scaremongering but we can't expect banks to be told they can't charge for overdrafts etc and not recoup money elsewhere. A real shame that those who can't manage their finances ruin it for those who can.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • ffacoffipawb
    ffacoffipawb Posts: 3,593 Forumite
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    jimjames wrote: »
    Definite scaremongering but we can't expect banks to be told they can't charge for overdrafts etc and not recoup money elsewhere. A real shame that those who can't manage their finances ruin it for those who can.

    Labour Governments for example.
  • talexuser
    talexuser Posts: 3,499 Forumite
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    ffacoffipawb wrote: »
    Labour Governments for example.

    I absolutely agree with that but don't think any hue of government would have been that much different in the run up to the crunch. After all the opposition always wanted more deregulation of the banks, and Osbourne was on record before the crunch as saying Ireland was the "shining example" the UK should follow!! - Brown/Balls were not the only ones who thought they knew everything.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    talexuser wrote: »
    Brown/Balls were not the only ones who thought they knew everything.

    Never live down the abolishment of boom and bust quotes. Will be ridiculed for life.
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
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    jimjames wrote: »
    those who can't manage their finances ruin it for those who can.
    I thought it was the other way round. Those who can't manage their finances paying high fees which were subsidising free banking for those who can.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
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    Thrugelmir wrote: »
    Never live down the abolishment of boom and bust quotes. Will be ridiculed for life.
    What about this one;
    "A generation ago, the very idea that a British politician would go to Ireland to see how to run an economy would have been laughable. The Irish Republic was seen as Britain’s poor and troubled country cousin, a rural backwater on the edge of Europe. Today things are different. Ireland stands as a shining example of the art of the possible in long-term economic policymaking, and that is why I am in Dublin: to listen and to learn". - George Osborne ,The Times Feb 23 2006
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • jamesd
    jamesd Posts: 26,103 Forumite
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    It is not true that the UK has a bail-in policy. The real UK policy is to have systemically important banks split into a holding company that does their borrowing and share issuing and an operating company that holds customer money. If the bank can't pay its debts what will happen is that the shareholders of the bank first lose their money then the bond holders lose as much of theirs as required. Meanwhile the operating company is transferred to a new holding company and just carries on dealing with day to day things. There's a similar policy in the US.

    If you own shares or corporate bonds issued by the bank either directly of within a pension you would suffer a loss, though.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    jamesd wrote: »
    It is not true that the UK has a bail-in policy. The real UK policy is to have systemically important banks split into a holding company that does their borrowing and share issuing and an operating company that holds customer money. If the bank can't pay its debts what will happen is that the shareholders of the bank first lose their money then the bond holders lose as much of theirs as required. Meanwhile the operating company is transferred to a new holding company and just carries on dealing with day to day things. There's a similar policy in the US.

    If you own shares or corporate bonds issued by the bank either directly of within a pension you would suffer a loss, though.

    Which is a sensible and logical approach, which unfortunately took a financial crisis to work out. I know many people on here have made money on preference shares in lloyds and rbs and whilst risky that has largely been possible due to government underwriting.
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