Why are savings rates on the floor?

blizeH

2010 wrote: »

Why rates are crap:

Banks and building societies draw £4.4bn in cheap money from Funding for Lending but lend just £500m more

http://www.dailymail.co.uk/money/news/article-2242219/Lenders-draw-4-4bn-Funding-Lending-lend-extra-500m.html

This is pretty sickening

latecomer

If the government cant figure out a way to force the banks to lend in return for getting cheap funding then of course the banks are going to abuse it - they are a business and only have one goal....... and its not to fix the economy.

2010

blizeH wrote: »

This is pretty sickening

Of course it`s sickening, you would have thought that five years after the banking crisis, when the taxpayer bailed them out, the government would have learned that the banks are not to be trusted.
Why do they keep printing money and giving it to the banks.
Why have they come out with this crazy lending scheme, which is making savers suffer.

When the EU wants to clamp down on banker`s bonuses, Cameron disagrees.
This government and the last seem incapable of controlling the banks greed.

grey_gym_sock

more unwilling than incapable.

latecomer

Absolutely - I suspect part of the problem is that UK doesn't have anything to export other than services and hence they are terrified that if they clamp down on the banks we'll lose that too.

2010

I always thought that a bonus was paid as the result of doing something exceptionally well and making MORE profits.

RBS LOST £5 billion but everyone receives a bonus.
Reward for failure.(at the taxpayers expense)

If Cameron is not so keen on some of the EU`s policies, give us the referendum on getting out and his problem would be over.

ColdIron

You are pre-supposing that there is much demand for lending, evidence exists that there isn't

In this case I don't think it's the fault of the banks, they are required by the govt. to increase capitialisation and are happy to use this govt approved mechanism to achieve it

The FLS is not living up to expectations, or perhaps it is
http://www.cityam.com/article/bank-loans-fall-six-months-fund-aid-plan

2010

http://www.bbc.co.uk/news/business-21661089

Osborne defending his banker mates at the EU.

talexuser

We continually get this argument about losing all the banking talent if the bonuses aren't big enough.... the talent that was so special it bankrupted all our major banks and brought the economy to its' knees for the past 5 years?

Gobosly

I normally go against the tide on this debate and support the bankers (no I'm not one), but not this time! On the funding for lending (and QE for that matter), I think the Government and BoE respectively have probably got it wrong. History will be the proper judge, but I just think that you cannot force banks to lend, however cheap the money you provide.

The truth is that banks lend less in recessionary times because the risk of default is higher. I honestly wonder whether the funding for lending has made any bank lend more than it would have otherwise. With the unfortunate side effect of making savers interest rates plummet the policy (in hindsight) seems ill conceived.

It would be better if if more people voted with their feet and actually removed their money from the savings accounts which have reduce their interest rates (nearly all). Personally I have transferred all of my cash ISA money into S&S ISA to put into conservative defensive stocks and funds. This is partly done as a protest, and I realise that many people will not wish to do that because they want to stick with cash. However the amount of cash in savings massively exceeds anything given to the funding for lending scheme. Consumer power could be a huge force if it could be mobilised.