Banks not passing on rates.

olly300

inca wrote: »

Many banks have passed or are going to pass on the cut to their SVR. I know that there are some that haven't and I appreciate that there are some people going through real financial hardship and I agree that the banks should be helping these people. However there are some decent rates out there, many rates have dropped, you can now get a sub 5% fixed rate without having to pay an extortionate fee. Sometimes it seems that people want the banks to be giving rates that either make them no money whatsoever or even worse, loss leading rates during an economic downturn which surely doesn't make sense. I know banks can be pains and all but the credit crunch seems to be making people forget that they are still businesses, still have costs and still at the end of the day want to make a profit like any other business. Why should they be expected to not make money? if they don't then you certainly won't from them.

You are presuming that everyone is in the position to move to a different lender.

Lots cannot not for various reasons i.e. negative equity, small loan to value, employment reasons.

The reason people are irate is that these lenders who won't drop their rates for borrowers are dropping them for savers with no hesitation with the addition that they have been helped by our tax money both current and future.

minimike2

Oh dear God.

You might as well Nationalise every single company in the country....

Do House of Fraiser rip people off because they charge £50 more than Tk Maxx for a pair of jeans?

What about Jaguar....dothey rip people off because thier cars cost 5x as much as a vauxhall corsa?

Hang on, i am being shafted by my butcher because he charges more for 2 chicken breasts than Asda does.....HE MUST BE NATIONALISED.

Jesus Christ people, get a grip.

opinions4u

olly300 wrote: »

they have been helped by our tax money both current and future.

Well, they haven't yet had their capital injections from HM Government, so technically I think you'll find they owe you nothing at the moment.

When it comes, I think you'll find that the actual benefit of this investment is that the likes of Lloyds and RBS will be long term profitable - in other words, HM Government (and by implication the taxpayer) will make a juicy little profit on the back of it.

As for the concept of centrsalised spending to get out of recession - that's a whole different debate about borrowing and future taxation that shouldn't be pinned on the bank bail-out.

Jimbo65

The tax money might not yet have gone in in full, but some has, there have been bail outs to prop up defunct disfunctional bankrupt banks, so let's not pretend otherwise.

How can any lender be defended for these actions? No rate cut, was the mantra in October, rates are not linked to BoE, suddenly, despite them rising and falling with BoE rates for the past 4 decades.....'It's the Libor rate that counts, the one we follow' they say. November spawns a dramatic fall in both Libor and BoE rates. So, ask Egg why 50,000 families are still waiting, only to be told by Egg that Egg themselves are still 'waiting' to make an announcement? 'What are you waiting for?' I asked. 'Dont know,sir.' Came the answer. Like I said, probably the 917 from Fenchurch St....See them goal posts? Well we moved them! Thaks for your money by the way!
GE Money: Happy Xmas everybody, the good news is the Libor rate is down to 4.2%, BoE rates at just 3%, the bad news however our rates areup by 1.95%. Yes, that does take your secured loan, taken in Good Faith from a far better lender than us that we bought up, to a whopping 13.15% Oh well, it'll be a happy Christmas to us, which is all that matters. Families being made homeless as a result? Couldn't give a flying one, sir. Thanks for your money.

These people pose a far greater theat to UK nationals than Al Quida could ever, and they're bank rolled, literally, by the Treasury. Bring back hanging, I say, hang the bankers, and abolish hanging again the following the day. The world be a far safer and more pleasant place without these vermin causing abject horror and poverty to line there own bonus filled pockets.

Jimbo65

Oh, and as for the Lloyds/RBS merger, than kind of monollithic dinosaur is precisely a substasntial part of the reason no actual competition exists in the market. Egg have withdrawn mortgage lending altogether, I understand. That's competitive then, isn't it? RBS should go to the wall where it belongs with all the other poorly run, greedy inept banks that have caused this disaster. Let them swing.

minimike2

What people fail to see is the bigger picture.

Do you even know what would happen to this country if the banking system collapsed?

Im not talking a re-occurence of the great depression. I am talking Zimbabwe and thier rediculous levels of inflation. I am talking the breakdown of society as we know it. I am talking zero exports and no cash for imports.

This is a serious reality which is why in this environment, people should think past it......

inca_2

Lloyds are taking over HBOS not RBS. Would you have rather seen HBOS go to the wall then? I can assure you that the effects of that would not be pretty

Jonbvn

It is a clear demonstration of the fact that the banks are NOT your friend. They are businesses. Like all businesses, their only interest is their bottom line.

Nationalising any business has generally proven to be a defunct ideology.

illgetthere

if the consequences of banks failing is that serious, then they shouldnt be left in the hands of private companies. They should all be nationalised. Otherwise its like writing a blank cheque if or when they fail, as it is implied that they MUST be saved, or the consequences would be catastrophic.

What a lucrative position for a private company to be in...

opinions4u

illgetthere wrote: »

if the consequences of banks failing is that serious, then they shouldnt be left in the hands of private companies. They should all be nationalised. Otherwise its like writing a blank cheque if or when they fail, as it is implied that they MUST be saved, or the consequences would be catastrophic.

What a lucrative position for a private company to be in...

1. It's not like writing a blank cheque. Shareholders have lost over 90% of their investment and the 'blank cheque' is an investment by HM Government buying in at or near the bottom of the market. Within 5 years you will see a significant profit for the taxpayer. It ain't lucrative for the companies themselves.

2. You miss the point about how a bank's balance sheet works. It isn't the same as 'normal' companies. 95% of the liabilities are savings/wholesale funding. The other 5% is shareholder's capital. If a chunk of the savings (or wholesale funding) is withdrawn, the bank becomes insolvent. Even if it is profitable. The irony of the credit crunch is that any losses declared by most (not all) banks this year will be less than the profits they announced 12 months earlier.

Don't forget, the Treasury banked £bns in stamp duty and inheritance tax from housing transactions. And the Treasury banked £bns in VAT as we went to B&Q to kit out our houses. The government built its economic success on the growth in the housing market that was funded by the wholesale funds that are simply no longer there. The FSA stood by and made insurance salesmen issue 8 page key facts document when flogging a contents policy (that baffles the consumer) but failed to regulate the growth in lending because the Government didn't want to reign in that growth. Prudent? You decide!

So, let's look at nationalisation as a reasonable option.

1) What competition did the state owned Girobank ever bring to the market place?
2) Do the mortgage borrowers at Northern Rock believe that they are treated fairly by their state owned lender when it comes to SVR, changing products etc?
3) How good are Northern Rock's savings rates?
4) National Savings has consistently offered some of the most appalling rates in the market place for years. They allow non-taxpayers and basic rate taxpayers to invest in accounts that are designed for higher rate taxpayers (the FSA would stop a high street bank selling if this scandal was practiced through its branch network). How many have been pulled in to Index Linked Certificates at a time when the BofE was mulling over inflation rates at less than 2%?
5) Bradford & Bingley mortgage customers are being treated like muck.
6) HM Government says "lend at 2007 levels if you want our capital". Isn't lending at those levels part of our current mess?

Yes, the banking system has got itself in to a mess.

Yes, the taxpayer is the only solution to get the banking system out of the mess - and it's right that shareholders (like me) should lose out and taxpayers should see a return on their investment.

But long term partial/total state ownership of the banking system would costs us all £billions through the removal of competition/innovation and the inevitable political dabbling. We will, in the next year or so, see politicians blaming the banks for sending companies to the wall. Farepak type examples where, actually, the company was stuffed. Don't forget, it was our politicians who increased borrowing levels at a time when tax revenues were high, leaving nothing in the pot to pay for an inevitable downturn. 1974. 1981. 1992. 2008.

Banks need to pull themselves out of this mess by lending less in order to remove their reliance on wholesale funds. This will mean a market that demands proof of income for mortgages, expects you to take a stake in your own house through a self-saved deposit and doesn't encourage people to invest 100% of their savings in landlord mortgages. It might mean house prices don't recover too quickly, but overall I think we will have a stronger banking system and a more responsible society to show for it.

Rant over.