Future prospects of British Banks - An Economics essay

Walletwatch

Hi

Am currently doing an Economics essay on the captioned topic as part of some coursework. The idea is to have this as a technical essay, essentially comparing British banks and commenting on their prospects, including backing info, charts, etc. anything that I can lay my hands on.

Given this has to be a balanced essay, with maximum perspectives, would request your inputs on this. Any website that you can refer to me for backing info, charts, etc will also be of great help.

Thanks
WW

F_T_Buyer

Come back with specific questions, and I may be able to help.

Maybe it would be good to explain the banking system, and how money is introduced into the economy. Then go onto what effects this has...

Some good websites that will be willing to help:

https://www.financialsense.com
https://www.housepricecrash.co.uk (check out the economics forum)
https://www.economicsuk.com/discussion
https://www.bankofengland.co.uk

Also, what educational level is this essay for (A level, degree??)?

Walletwatch

Thanks F_T_Buyer, for the prompt response. This is an undergraduate level essay, where the topic is broad to cover the whole macro-economic scenario, and its effects on British Banks as a whole.

I have drafted the following questions which i would like to address as part of the essay:

1. Recent happenings in the UK economy over the past two to three years. e.g. rise in interest rates from an all-time low of 3.5% to 4.75% (or maybe 5% effective today), rising debt levels, rising house prices, inflation targets and rising inflation. It could briefly touch upon the move from the RPIX to the HCIP about three and a half years back, but maybe that wouldn't be current enough.

2. Impact on the banking industry of each of these happenings

3. Secondary data in the form of hard numbers to back the above theory.

Thanks and sorry if I was very vague in my previous post.

Cheers
WW

F_T_Buyer

Still way too vague without me writing the essay for you.

I'd start by questioning what the roll of the bank of england's job is. If you look around the BoE website you will see they target inflation. But you have to understand what inflation is first.

Inflation is the decreasing level of purchasing power. In modern times, it's turned on it's head by saying inflation is rising prices. The big issue is why does the purchasing power of money reduce? It's because the BoE increases the money supply.

So, if the BoE are causing inflation by increasing the money supply, isn't it a contradiction in targetting it's result - inflation. Yes it it. Therefore, the real job of the BoE is to target demand, demand for money. They have the lowest rates possible while keeping demand up. I.e. real interest rates (adjusted for inflation) are at the lowest ever!

But, it doesn't result in falling demand for sterling because the whole world is doing the same. If they all inflate (or devalue) at the same rate, demand remains constant.

lush_walrus

As F_T_Buyer has said you are still being pretty vague. Both economics and banking are huge. What module is it for, that might give you a starting point. If I were you I would pick an economic theory and see how banks and the economic cycle changes we are going through fit to the theory. The changes happening at the moment are not significant in terms of the economy and are only the start of the change, not the actual change. Perhaps look at historical information regarding the economic cycle and where we are at the moment within it (in some theories there are thought to be 5 stages to the economic cycle, but if I were you I would check what you have been taught and base it on that). Then look historically at what devises the banks used previously to respond to the stage we are at and see if you think that is what will happen this time. My hunch is you will actually find that although there are certain moves that the banks are making at the moment, there are quite a few new movements being made to keep banking in profit.

But, that is my idea of how I would go about the topic, there are a million and one other ideas that can come out of a topic, what are you interested in, did you choose banks or did your Uni specify it, if you picked banks why? The reason you picked it will be the essay you write.