Suggestion: Separate recommendations for banks which have not been bailed out

ianmoticon

Given the ever-deepening problems with banks, of which there never seems to be an end, I think a lot of people are concerned about who to trust.

I think the site, when recommending banks in any section, should either:

1. Indicate whether this is a 'bailed out' bank or not
2. Have a separate recommendation section, recommending accounts/deals etc of bailed out banks and of those banks who have not been bailed out.

I don't believe this is panic-mongering. I think that the time has come where consumers need this information. This will help to make our decisions more informed in the light of the sheer incompetence and criminal actions of some institutions.

MSE_Martin

Thanks for the suggestion.

I must be honest, Im slightly confused by what you're actually suggestion. Are you saying banks that have been bailed out more or less secure?

The worst bank of the lot was Northern Rock, now the safest.

RBS has been through nightmares but is now majority govt owned?

I've always maintained this site will focus on the protect then detail the protection available; and we're going to stay that way.

To be honest, what you're suggesting involves a great deal of second guessing... after all wha tis a bailout - does the govt need to own a share, or is the bank of england needing to give money to relieve credit issues a bailout - also remember the rules now state the Bank of England needn't tell us if it's helping out.

As soon as you start guessing "who's strongest/safest" who's not you are hostage to fortune to making mistakes. Neither I nor my team are experts on bank solvency issues - we study their products. So Im afraid we simply can't help with this request; it wouldn't be appropriate.

Kind regards

Martin

ianmoticon

I don't think we know whether or not bailed out banks are more or less secure. What we have seen by recent events, is that the amount of bailing out doesn't seem to be ending. It's not inconceivable that the government may no longer be able to support an institution in the future. It's not inconceivable that the government would not be able to reimburse everyone who it guarantees savings for.

And yes, the new laws do make it difficult for us to track if a bank is being bailed out or not. However, at the very least, when recommending a bank's products, it might be useful to have a link to a profile/history of a bank, outlining any recent developments which are known (e.g. receiving billions of the tax payers money!). This is simply public domain information linked to products/recommendations offered by an institution. Despite the new law, information will inevitably become available about the financial stability of institutions. When consumers are making an informed choice about where to invest their money, this information is as useful as interest rates and other advantages.

The site doesn't have to contain recommendations/speculation about the stability of an institution, but supporting facts (i.e. known financial help, bail-outs etc) regarding an institution's stability are in the interest of the consumer.

Responsible choice of product must go hand-in-hand with an informed choice using the history of an institution. This is no different to a consumer investing in shares in a company, and checking out the company's history.

These are exceptional times. You can't assume that all institutions are safe, and that, in the worst case, the government will pay out for what it now guarantees. At the very extreme level, we may one day have to ask whether or not we can trust an institution, or indeed if we can trust the government's guarantees. Iceland is an example of a country which has teetered on the brink of bankruptcy and not payed out money which it previously guaranteed. That's a fact. Morally and ethically you can't be recommending people to invest in institutions which have strong evidence of being on the verge of collapse. You must provide some sort of summary as to the facts surrounding an institution, its finances, and any relevant information in the public domain. After all, no matter how good the deal was, you wouldn't get BBC's Watchdog recommending the services of some companies who have been known to conduct business in an unsound manner.

The game has changed. Some would say that bankers have conducted business in a criminal manner. It is very different to how it was 3 years ago, and anyone recommending services of such people cannot ignore the responsibility to inform the public about an institution's history.

All the best