Ed Milliband promotes living wage as labours next big thing

N1AK

Conrad wrote: »

Each of us also contribute to the maximising of profits as a result of us shopping around for pension and ISA providers that have demonstrated good past performance, ALL of which relies upon corporate profit maximisation.

This is my single biggest gripe with the 'publics' response to the financial crisis. "It's all the banks fault" they say; completely ignorant that when they look for the best returns, interest rates etc they are encouraging exactly that kind of risky behaviour that they complain about.

You want a savings account with good customer service that isn't lending your money on risky loans? Fine, they'll lend it out on low risk products for maybe 5% which after the costs involved means that they make maybe £25 per £1k saved after the costs and risks involved. Now they need to support the ATM network, call centre staff, branches, branch staff, security and fraud teams, credit cards, bills and statements, advertising, hr etc. That £25 isn't going to cover it and make a profit so they'll need to charge you to run the account. Look at all the moaning in the press and in general about the idea that people might have to pay for a current account to see the blatant hypocrisy.

Conrad

grizzly1911 wrote: »

A cynical realistic view perhaps.

The garage has a happy workforce and he also has an apprentice. As you say I doubt he has all the soft stuff but would expect he adheres to the statutory requirements and a bit more - I also know his bookkeeper but he doesn't know that.

The last point is a difficult one as most tyres and printers are made somewhere in the far east these days even under brand names. For most men in the street they would have to specifically hunt out something from the "west".

Even if you buy a premium product there is no guarantee it has actually been produced where you would expect with globalised production.

I agree with all this but my fundamental issue is with those that seek out best value regardless of workers rights and incomes, and yet in discussion they preach we should have better wages and conditions for all!

The very same people will pour over WHICH when deciding on a pension and all too often go for those that have performed well who's entire performance relies on those nasty corporate profits they claim are bad for society, arghhhhhhh


It's as if peoples politics and actions aren't joined up.

Conrad

N1AK wrote: »

This is my single biggest gripe with the 'publics' response to the financial crisis. "It's all the banks fault" they say; completely ignorant that when they look for the best returns, interest rates etc they are encouraging exactly that kind of risky behaviour that they complain about.

You want a savings account with good customer service that isn't lending your money on risky loans? Fine, they'll lend it out on low risk products for maybe 5% which after the costs involved means that they make maybe £25 per £1k saved after the costs and risks involved. Now they need to support the ATM network, call centre staff, branches, branch staff, security and fraud teams, credit cards, bills and statements, advertising, hr etc. That £25 isn't going to cover it and make a profit so they'll need to charge you to run the account. Look at all the moaning in the press and in general about the idea that people might have to pay for a current account to see the blatant hypocrisy.

Great point.

Everytime I hear someone preaching about greed, or against corporate profits or claiming they want higher taxes, I always think "mmm I bet they cling to every last penny, shop around for cheapest, get cross if thier ISA or pension underpreforms".

Have this thought in your mind next time one of the high profile lefties comes on Question Time.
It staggers me people fall for the likes of Steve Coogan and Tony Robinson, very wealthy people that nno doubt use private wealth managers and expolit tax loopholes.
I bet they don't volunteer extra tax either:rotfl:

POLY TOIGNBE - watch how mindless sheep on QT applaud her sentiments on reducing carbon emmisions. The witch has a massive Tuscan villa!

GEORGE MOBIOT - keep in your head when he preaches green behaviour that he has 4 kids!!

TONY BENN - he makes speaches about re - distribution that again get the monkeys applauding, and yet he has a massive esate in Essex and a £5m London home. Not a whiff of re - distribution going on.

BILLY BRAG - a right - on guy, down with the miners. But has a £2m house overlooking the Channel.
His whole demeanour conveys humble modesty, but it's all an illusion.


To me these people are worse than Bankers who at least don't pretend not to be self interested.

grizzly1911

N1AK wrote: »

This is my single biggest gripe with the 'publics' response to the financial crisis. "It's all the banks fault" they say; completely ignorant that when they look for the best returns, interest rates etc they are encouraging exactly that kind of risky behaviour that they complain about.

You want a savings account with good customer service that isn't lending your money on risky loans? Fine, they'll lend it out on low risk products for maybe 5% which after the costs involved means that they make maybe £25 per £1k saved after the costs and risks involved. Now they need to support the ATM network, call centre staff, branches, branch staff, security and fraud teams, credit cards, bills and statements, advertising, hr etc. That £25 isn't going to cover it and make a profit so they'll need to charge you to run the account. Look at all the moaning in the press and in general about the idea that people might have to pay for a current account to see the blatant hypocrisy.

If we wind the clock back say 30 years banking provided free banking, cheque books, clearing system, fully staffed (in all specialties) branches, good customer service, lent money profitably in a controlled fashion and competitive if not shattering savings products. They still had all the background costs you mention and much less efficient computer systems/records to help. They still made consistent profits, not stratospheric but still good compared to many other sectors. They also had Merchant Banking divisons that dabled in the riskier more speculative wholesale business.

Through continued change they have whittled away to "streamline" their operations. They have automated many of the processes (with an associated ongoing cost in technology), centralised production into bunkers with lower paid and qualified staff , adopted computer scoring into lending and made banking self service through the internet . They have reduced the cost/income ratios.

They have had to open their doors to more low value accounts but these are far more easy to control with cards and computer systems.They quite rightly charge penal rates if customers "take" money.

Banks simply became greedy, short term gambling rather than making long term risk assessed decisions. More interested in earning a quick fee for little or no work.

So expecting a free account that costs them less than before when many people keep sizable "floats" in, or with positive predictable cash flow through, their accounts I don't think it is unreasonable to expect "free" standard banking.

Obviously if you want a premium service and the ability to talk to someone who has a reasonable grasp of finance and operations then I would perhaps expect to pay some form of premium.

grizzly1911

Conrad wrote: »

I agree with all this but my fundamental issue is with those that seek out best value regardless of workers rights and incomes, and yet in discussion they preach we should have better wages and conditions for all!

The very same people will pour over WHICH when deciding on a pension and all too often go for those that have performed well who's entire performance relies on those nasty corporate profits they claim are bad for society, arghhhhhhh


It's as if peoples politics and actions aren't joined up.

I appreciate the point you are making. There is only one pot.

N1AK

grizzly1911 wrote: »

So expecting a free account that costs them less than before when many people keep sizable "floats" in, or with positive predictable cash flow through, their accounts I don't think it is unreasonable to expect "free" standard banking.

In all honesty do you think you can compare the cost structure, benefits provided and charges levied by banks 30 years ago vs today? I can't pull the entire picture together but I do know that the 1980s was when 'free' banking became standard and when exorbitant fees for cheques bouncing etc become standard.

I also know that dishonest selling of bank, saving and investment products was rampant. It's obviously worth giving someone a good deal on their current account if you can mislead them into getting over-priced insurance, mortgages etc from you by doing so. Bank interest rates in the 1980s on anything other than saving products, and even there normally, were much less competitive than today.

What needs to be understood is that normal banking isn't 'free' even if we aren't paying anything for that service. At best, from a selfish perspective, it is subsidised by someone else generally less fortunate than ourselves. Alternatively it might be based on the higher chance you will pick other products they offer, and those products will include a markup to cover the current account discounts.

N1AK

Conrad wrote: »

Great point.
Everytime I hear someone preaching about greed, or against corporate profits or claiming they want higher taxes, I always think "mmm I bet they cling to every last penny, shop around for cheapest, get cross if thier ISA or pension underpreforms".

In my own defence, as someone who almost all of that is true for, when I say I would be happy to pay more tax I mean it and I think some level of greed is pretty much universal.

My pension currently operates by salary sacrifice so I'm effectively avoiding some of the NI I would be paying otherwise yet it is a loophole that I want closing. Is that hypocritical? Maybe, I honestly can't say I'm definite it isn't. Is it greedy? Surely it must be a little; however I honestly think my biggest motivator is that I would be frustrated knowing I pay more tax than I have to when there's a widely exploited avoidance mechanism that many other people are using.

grizzly1911

N1AK wrote: »

In all honesty do you think you can compare the cost structure, benefits provided and charges levied by banks 30 years ago vs today? I can't pull the entire picture together but I do know that the 1980s was when 'free' banking became standard and when exorbitant fees for cheques bouncing etc become standard.

I also know that dishonest selling of bank, saving and investment products was rampant. It's obviously worth giving someone a good deal on their current account if you can mislead them into getting over-priced insurance, mortgages etc from you by doing so. Bank interest rates in the 1980s on anything other than saving products, and even there normally, were much less competitive than today.

What needs to be understood is that normal banking isn't 'free' even if we aren't paying anything for that service. At best, from a selfish perspective, it is subsidised by someone else generally less fortunate than ourselves. Alternatively it might be based on the higher chance you will pick other products they offer, and those products will include a markup to cover the current account discounts.

For basic banking facilities yes they are comparable.

Free banking had been there years before that and it was before the sales mad frenzy when banks went off the rails. I agree that hard sell, poor sell, mediocre products are cross sold. Nobody forces them to be taken. This cross selling process is no different to many other products and services. Do you buy shoe cleaner when you buy a pair of shoes, do you take premium upgrades to get faster service - amazon for example?

Their cross selling hasn't always lead to pots of gold for them either.

Quite frankly if you take money that isn't there I have no qualms in the Bank charging to control that behaviour.

On alternative posts you show little concern for those less fortunate so I am not quite sure why it should apply to Bank accounts.

I doubt an in credit (or even in limit), bank account, used for normal personal business, costs that much to run. It does not requires costly monitoring , control functions and recovery functions to start with.

mystic_trev

Conrad wrote: »

TONY BENN - he makes speaches about re - distribution that again get the monkeys applauding, and yet he has a massive esate in Essex and a £5m London home. Not a whiff of re - distribution going on.

Ahhh - you mean Sir Anthony Wedgwood Benn. You can the Title from the man, but not the man from the Title!

http://en.wikipedia.org/wiki/Tony_Benn

Graham_Devon

REALLY interesting discussion from both Grizzly and NIAK looking at 30 years ago vs today.

I have seen this sort of discussion elsewhere before now, and I believe the problem is that we expect perpetual growth.

The bank may well have survived perfectly fine 30 years ago with more prudent practices, but the need for growth creates the need for further profits. The need for further profits fuels further products aimed at more and more people, people who wouldn't have qualified for previous products.

So, you create growth by targetting people you couldn't target before...fantastic. But you still need more growth. Investors want more profits. So you have to do the same again, attracting more people with more products...and so it continues.

It's the same with many business. Tesco is a prime example whereby growth is demanded, but there is little they can do to provide any more growth, and we saw recently how investors punished them, wiping off 30% of the stock value in a day, and it's not since recovered as Tesco simply can't create any more growth, firstly because they are so damn big and theres no where left to go, and secondly because we haven't got any money left thanks to the growth in producst elsewhere pumping up the prices of commodity goods.

Capitalism needs this perpetual growth, so although banks and business can function perfectly at lower profit margins, the investors could hammer them into bankruptcy if they don't make more and more money....and therein lies one of the biggest issues not often talked about. IMHO anyway.