What's trickling down on my back

michaels

But even if they do 'spend' their current account balances surely the money just reappears back in the banking system somewhere else? Holding on to cash is expensive so wherever the income is spent surely it quickly gets redeposited in to the banks asap?

Generali wrote: »

It's because people don't usually move large sums out of their savings accounts whereas most people spend their current account down to about £0 by the end of the week/month.

Generali

michaels wrote: »

But even if they do 'spend' their current account balances surely the money just reappears back in the banking system somewhere else? Holding on to cash is expensive so wherever the income is spent surely it quickly gets redeposited in to the banks asap?

I would imagine that you are right.

I suspect that the reason that current accounts don't work on a fractional reserve basis is that while the money remains in the banking system it doesn't remain with a specific bank.

antrobus

DiggerUK wrote: »

At the time of the repeal, current accounts were available free of all charges....

In 1986 free banking when in credit was only available from the Midland Bank or one of the Scottish banks -which in practice meant (if you weren't in Scotland) Williams & Glynns, since BoS had hardly anything south of the border. It was regarded as something of an innovation when Midland went for 'free banking' in 1984 and the general view was that it wouldn't catch on.

It was that other piece of legislation from 1986, the Building Societies Act that changed things because it allowed building societies to operate current accounts. In 1987 the Nationwide and the Abbey National launched charge-free interest paying current accounts. They were both so successful that the banks were forced to abandon charges and by 1989 even Barclays had given in.

Or to put it another way, your idea that 'free banking' is somehow the God given right of every Englishman dating back to time immemorial is quite wrong.

antrobus

chewmylegoff wrote: »

Banks cannot lend against current account balances,

Where does it say that in the FSA rule book?

chewmylegoff wrote: »

...
they have to hold cash 1:1 to cover the bank's liabilities to current account holders.

You're telling us that banks have to keep wads of tenners stashed away in their vaults to cover the balances held on current accounts?!?

antrobus

Generali wrote: »

I would imagine that you are right.

I suspect that the reason that current accounts don't work on a fractional reserve basis is that while the money remains in the banking system it doesn't remain with a specific bank.

Current accounts do work on a 'fractional reserve basis'. That's usually one of the complaints of the fractional reserve mob, and one of their usual solutions is to insist that banks should be required to hold the full amount held on current accounts in reserve and to only be able to lend out those balances that are held on time deposits.

DiggerUK

antrobus wrote: »

......your idea that 'free banking' is somehow the God given right of every Englishman dating back to time immemorial is quite wrong.

That is not my idea, just you putting words in my mouth, and some spin on your argument that does nothing less than defend the banksters right to fleece us.

Before the repeal, nobody was charged to receive their pay.
Now there is a proposal that we would have to pay to be paid, that is wrong.

What has changed since the repeal, that means the banksters need to be paid for something they have been happy to provide free for 40 years. Greed maybe?
..._

antrobus

OK then, let's summarise:-

You said: "In the 1980's the government ended the right to demand our wages in 'coin of the realm'."

Wrong. That right only applied to a minority of manual workers.

You said: "The promise made at the time, was that we would not have to pay to get our pay, and that free current accounts would be protected."

Wrong, no such promise was made. No such promise could have been made, because 'free current accounts' were not the norm at the time.

You now say: "What has changed since the repeal, that means the banksters need to be paid for something they have been happy to provide free for 40 years"

The Truck Acts were repealed by the Wages Act 1986. I make that 26 years ago. And has been pointed out to you, the majority of bank accounts were not free 26 years ago.

Is there anything else you'd like to get wrong? The date of abolition for stamp duty on cheques perhaps?

DiggerUK

Current accounts were free, from being a student in the 60's, till now, I have never paid to have an account.

Wages were received without charges by those protected under the Truck Acts, as were most others wages.

The banks were happy to have their customer base expanded with the repeal, if they were not happy they would have lobbied the government to abandon the repeal, they didn't.

Most who opposed the change did so on the basis of an historical mistrust of banks. Strange that one.

At the time I was a bit bemused at the opposition, but as an active trade unionist I can remeber quite clearly the promises that the changes "would cause no detriment", an assurance that could prove to be worthless. Paying to receive my pay is detrimental to my wealth, and at between £8 and £15 a month for current accounts, a nice multi billion pound earner for the banksters.

Why do you continue to support the banksters right to be given another way to fleece us.
..._

Generali

DiggerUK wrote: »

Current accounts were free, from being a student in the 60's, till now, I have never paid to have an account.

No they weren't. For a start there was a tax on cheque use and I can remember Which! publicizing that Abbey National were the first providers of 'free' current accounts in the mid-late 80s. I can also remember friends complaining that the 'free' account was terrible because if they miscalculated by a few pence they'd be charged a fiver or tenner.

DiggerUK wrote: »

Wages were received without charges by those protected under the Truck Acts, as were most others wages.

There was never a charge to receive a cheque. There was a charge in the mid-80s for depositing it into your account.

DiggerUK wrote: »

The banks were happy to have their customer base expanded with the repeal, if they were not happy they would have lobbied the government to abandon the repeal, they didn't.

Most who opposed the change did so on the basis of an historical mistrust of banks. Strange that one.

Got a link for any of this? I recall a debate on LBC about the repeal of the Truck Acts and banks never got a mention. The point of the Truck Acts was to prevent factories in company towns from forcing workers to use their wages to buy overpriced goods from the company they were working for. Their repeal was because that was no longer a social issue.

DiggerUK wrote: »

At the time I was a bit bemused at the opposition, but as an active trade unionist I can remeber quite clearly the promises that the changes "would cause no detriment", an assurance that could prove to be worthless. Paying to receive my pay is detrimental to my wealth, and at between £8 and £15 a month for current accounts, a nice multi billion pound earner for the banksters.

Why do you continue to support the banksters right to be given another way to fleece us.
..._

Who should pay for your 'free' current account? The present business model is that the poor and disorganised pay. I think the users of the service should pay.

I like to get a haircut once a month and a massage once a fortnight. I would prefer that you pay for them. Why shouldn't you? After all, I have to put up with a ton of abuse for being a 'bankster' despite providing an essential service, ensuring that my clients' pensions aren't stolen.

antrobus

Generali wrote: »

No they weren't. For a start there was a tax on cheque use .

Free banking for students was fairly standard in 1980. But the minute you stopped becoming a student you had to pay charges. And the tax on cheque use went in 1971.

Generali wrote: »

and I can remember Which! publicizing that Abbey National were the first providers of 'free' current accounts in the mid-late 80s. I can also remember friends complaining that the 'free' account was terrible because if they miscalculated by a few pence they'd be charged a fiver or tenner...

Yes, it was the Abbey National and Nationwide who launched their products in 1987 that basically brought in the era of 'free banking'. At that time the likes of Nat West, Lloyds and Barclays all insisted on an average balance of £500 to avoid charges (about £1200 in today's money?) If you wanted free banking the choice would have been between Midland and Williams & Glyns or moving to Scotland.