Bankers are not cost efficient...

chewmylegoff

Pretty sure that is the contribution of the whole of the financial services sector rather than just banking, but yeah.

lemonjelly

Forgive my insane childish ramblings.
Exactly how much wealth have they been creating in recent years? Seems more likely to me that taking into account the levels of bail outs required, there hasn't been that much wealth creation by the banking industry. More they've been a drain on the economy. From my limited knowledge, that drain is going to lasy a fair few years. So, where is this wealth creation?

FWIW, the aggression from the defence is a bit over the top. I'm sure there are many good genuine people in the finance sector, none of whom are inherently bad or immoral people, who do good solid work. But they bought into the mindset as a whole in recent times for risky trading etc, which basically undermined the system within which they operate. I'm asking genuine questions, as I'm not working in London at the centre of this storm. So educate me, rather than resort to the insults eh?

My question as to how they build trust remains imo. Their actions have not endeared them to the people who bailed them out. How are they going to rebuild this damaged trust? How are we as a populace going to develop the trust in our financial systems? The watchdog has said it was lax. The watchdog has said the banks were more than lax. What is the next step?

lemonjelly

julieq wrote: »

Banking sector contributes £58B in tax, 11% of the total. Year in, year out.

If you don't think that's worth having because of a couple of Daily Mirror headlines, then good luck to you but you're not going to get much of an NHS if it goes. This bank bashing is insane, and it's getting increasingly hysterical.

Which raises the question, how much did - the bank bailouts actually cost us? And how much are they still costing us?
Fortunately, the National Audit Office has looked into this - with a report out in July this year. It shows the level of financial support given by the government to the Banks since 2009. The report tries to make an assessment of how much they still owe us now, after repayments, fees and interest. The headline figure is £456.33bn, down from £612.58bn in March 2010. The peak was a mighty £1.162 trillion. The total outstanding support is 31% of March's GDP.

Actual money is the smallest part: £123.93bn was provided in the form of loans or share purchases, which required a transfer of cash from the Government to the banks. Another £332.40 billion is in the form of guarantees, where the Government will only provide cash if things go badly wrong.

Our investment in banks is worth less:

According to the report, the investment has gone down during 2010-11 by:

• £10bn of debt guaranteed by the Credit Guarantee Scheme has matured;
• Royal Bank of Scotland assets covered by the Asset Protection Scheme have
been reduced by £49.70bn through run-off of the portfolio, disposals, early
repayments and maturing loans, which has reduced the Treasury's share of the
exposure to the assets by £43.81bn
• the liquidity provided by the Special Liquidity Scheme has reduced by
£91bn due to contractual maturities and early exiting from the individual swaps
by participants
• guaranteed liabilities in the wholly-owned banks have reduced by £9.10bn
mainly due to maturing liabilities
• £2.46bn of loan repayments have been received from banks and the Financial
Services Compensation Scheme, offsetting an increase to the loans of £0.12bn

All smacks of a net loss to me.
So where is the wealth creation again?

FTBFun

NEF found that tax ­accountants who help the rich cut their bill were even worse value, ­costing us £47 for every £1 they create.

Happy to help.

BTW if anyone can find the actual study this story links to that would be great. I can't find it anywhere on the New Economic Foundation website (which seems like a quite sensible site - I have a feeling the Mirror has spun it somewhat).

lemonjelly

FTBFun wrote: »

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Happy to help.

BTW if anyone can find the actual study this story links to that would be great. I can't find it anywhere on the New Economic Foundation website (which seems like a quite sensible site - I have a feeling the Mirror has spun it somewhat).

Yeah, I've been looking for it too, as I'd have preferred to like to the direct report myself.

chewmylegoff

lemonjelly wrote: »

Forgive my insane childish ramblings.

That was aimed at the claim within the article rather than your good self.

Also the bank bail out never cost £1 trillion or anything like it. That is the total amount the tax payer could have been on the hook for if all of the guarantees that had been given had bitten.

The cost in cash terms is something like £120 billion I think. Even if we ultimately lose all of that it is only 2 years tax revenue from the sector. The article has been written from an anti banking view point deliberately taking the short term worst possible view.

Clearly banks have not behaved well, and we all know what has happened, it is largely a matter of record. This is not the same as the financial services sector being a net detractor from our economy in the long term.

chewmylegoff

FTBFun wrote: »

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Happy to help.

BTW if anyone can find the actual study this story links to that would be great. I can't find it anywhere on the New Economic Foundation website (which seems like a quite sensible site - I have a feeling the Mirror has spun it somewhat).

Saying tax accountants are draining wealth from the country is especially crazy. The government creates a tax system. The complaint is therefore that legal compliance with that tax system such that the correct amount of tax that is legally due is paid is detracting from the economy.

Perhaps the govt could put in place a tax system that collects the amount of money it is designed to collect?

FTBFun

chewmylegoff wrote: »

Saying tax accountants are draining wealth from the country is especially crazy. The government creates a tax system. The complaint is therefore that legal compliance with that tax system such that the correct amount of tax that is legally due is paid is detracting from the economy.

Perhaps the govt could put in place a tax system that collects the amount of money it is designed to collect?

Apparently we should all pay the tax, even if it is wrong (and if HMRC have anything to do with calculating it, frequently so).

FTBFun

FYI - there's a thread on DT with this (including links to the actual report from, er, 2009)

https://forums.moneysavingexpert.com/discussion/3668973

ruggedtoast

Looking at this dispassionately.

In a time of recession when the majority of people are suffering a falling standard of living, with no end in sight, people who work for an industry which in the eyes of many laymen has been a catastrophic and costly failure; are bound to be in the firing line.

Especially if they appear to be awarding themselves yearly salaries most people won't make in an entire career.

If the banking industry had a level of foresight that has hitherto been somewhat lacking in it's activities, it would be spending some of its vast wealth on a significant PR push. However I suspect most of the people at the top of these organisations care little about what will happen to their companies in 10 years time, and much about how much is going into their personal bank account that year.

As it stands the banks seem to be heavily in hock to a large number of tax payers who are thoroughly fed up with them and have yet to be given any sensible reason why they shouldnt be.

Its not surprising therefore that articles like the one in the Mirror abound.