Banks stealing our savings

Tafia

jimjames wrote: »

That has already happened. The BoE and Govt will lend the money to the scheme to pay back.



Theft is taking something without permission of the owner. You lend your money to the bank and can get it back at any time so where is the theft? A theoretical risk of not getting money back in the UK does not equate to the exaggerated title of this thread.

Didn't they swipe our interest without our permission?

Tafia

agrinnall wrote: »

Well done, overinflated thread title of the day.

In what way are 'the banks' stealing anything? Even if it did happen, the money goes to the government, and eventually to whoever is providing the money to keep them afloat, not to the banks [although they may be beneficiaries of whatever stability the action taken might lead to].

Put these words into Google for more on this:
It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors

Masomnia

I still think I'm the only person who thinks this is a positive development

Banking is an inherently risky business, depositors should shoulder some of that risk.

rb10

Tafia wrote: »

Saw a finance programme some time ago which claimed that if a big bank failed, there would not be enough cash in the compensation scheme to pay all the savers in that bank.

In that case, I believe that compensation would be paid by the Treasury.

It would then be repaid by the other (surviving) banks through an increased FSCS levy.

innovate

Tafia wrote: »

Perhaps you need to read it again.

Yep, read it again, and there is still absolutely nothing in your quoted text [or anywhere else, for that matter] that confirms that "banks have given themselves the right to swipe money from our savings accounts should they feel the need", as you said they had done.

For sensationalist effect, you might want them to have the power to do something like that, but you are sadly disappointed because banks (and/or BSs) do not have the powers to award themselves such rights.

jamesd

Congratulations on a nice attempt at scaremongering without apparently bothering to take the trouble to read enough about what you were scaremongering about to discover that the scaremongering was meritless at least up to the FSCS limit.

"Under both the U.S. and U.K. approaches, legal safeguards ensure that creditors recover no less than they would under insolvency".

"The Banking Act also provides the U.K. authorities with a bespoke bank insolvency procedure that fully protects insured depositors while liquidating a failed bank’s assets. These powers have proved valuable; for example, during the crisis they allowed the authorities to transfer the retail and wholesale deposits, branches, and a significant proportion of the residential mortgage portfolio of a failed building society to another building society."

The FSCS pays out if a bank becomes insolvent, so deposits up to the FSCS limit would be protected. And those same depositors are the "insured depositors" in the quote.

To answer your question about banks and building societies, there have been more building society than bank failures in the UK in recent years. But for what worries you it's important to have your money with a small institution that is not big enough to be systemically important. A failure of that institution would not be troublesome to resolve in amounts or complexity so you'd be about as safe as you can get. Avoid the tiniest of places due to possible poor financial controls and the biggest because they are systemically important.

As to who does pay: "32 Debt securities would be cancelled or written down in order to return the firm to solvency by reducing the level of outstanding liabilities. The losses would be applied up the firm’s capital structure in a process that respects the existing creditor hierarchy under insolvency law.". Debt securities are mainly corporate bonds, something different from term deposit accounts. So if you don't want to be bailed in, don't buy the corporate bonds of systemically important banks. But you can lose money in any insolvency because bond holders are creditors and the lowest ranking ones can still lose out. They are supposed to know that when they decide to purchase the higher risk part of the company's borrowing instead of the lower risk parts.

Ark_Welder

I realise that the weather is turning for the worse, so there might be more of a temptation to remain under the bridge, but could we at least have a bit of originality please (apart from the different name)?

https://forums.moneysavingexpert.com/discussion/4529219

bowlhead99

Tafia wrote: »

There is always one in every forum. If you don't think that taking virtually interest free loans from savers and using the cash to pay themselves huge "bonuses" for simply doing their jobs, in some cases very badly, is not a form of theft, then what is it?

Oh no, a company made profit and paid a high salary or bonus to an executive. Shocking! Or maybe the company (controlling billions of pounds) made a loss and paid a high salary or bonus to a person who helped it not lose billions more.

Calling it something else doesn't change the outcome. Money which should be going to savers is being kept by the banks.

What money should be going to savers? They do not want to take any more than zero market risk, so they deposit money in bank accounts with a promise that they can access the money (generally whenever they like, from whereever on the planet they like) on short notice and with a guarantee backed by the entire industry (and, likely, government in a worst case scenario), a guarantee which has never failed the typical UK depositor.

On receipt of the cash from the UK saver, the bank can choose to lend it on prime loans and mortgages or sub prime loans and mortgages or whatever it likes, subject to the ever-more-onerous UK and EU regulation. The risk is entirely with the bank, because it has promised to give the same nominal cash back to the saver. The bank may make some profits, from this arrangement. Banks have existed and operated in this fashion (borrowing at low rates to lend at high rates) since before your grandparents were born.

The scam helps the banksters and borrowers and takes savers money to do it. It's not rocket science.

The 'scam' that is "Tesco" helps me access bananas which do not grow in my country and helps Tesco make profits. It is arguable that the grower in Tanzania could make more revenue for himself if he were to sell the banana direct to me. However, he doesn't know where I live, and he doesn't want to create an entire logistics chain and open a store selling bananas a few minutes drive from my house, just in case I fancy a 2am banana every 6 weeks.

By the same rationale, perhaps I could loan money to a range of residential and commercial mortgagees and businesses, direct. It would be horrendously inefficient and I would need a huge amount of cash to make it happen, to diversify my risk low enough to offer a reasonable rate of interest and allow the businesses and individuals to access affordable finance and develop their businesses and lives. I accept that I cannot do this and as someone with meagre finances (compared to the top 0.1% of our households) I will have to just lend the money to the middleman to lend it on. That middleman does not owe me a living, and if he did not exist I would have to keep my cash at home and hope it didn't get burnt down or stolen, while receiving 0% AER.

Is your suggestion that banks be prohibited from making profit? Or that the government should be completely passive and not attempt to stimulate markets and improve growth through access to finance? Because zero ability for people and corporations to control resources and generate profits for personal gain, sounds very anti-capitalist. Whilst zero government intervention to market forces sounds very capitalist.

Whatever your philosophy, it sounds like you're disappointed that you're unable to get free money from the banks for just sitting there with your money in their vaults risk free. Are you perhaps retired, or just generally unwilling to earn your crust by working or investing like others in society might choose to do? I presume you are not trying to launch an entrepreneurial business to create employment, or buy a house, in which case low interest rates would have been more useful to you, and confiscation of assets from failed businesses and their backers would be understood. Such rates rise and fall over economic cycles. You were probably not happy with 15% interest rates a few decades back, because of similar levels of inflation. Recognise that you are only one in a sea of views on the subject of interest rates.

MoneySaverLog

I would be more concerned that they are steeling our savings by turning the printers on

Chargem

Tafia wrote: »

Hi folks,

I keep reading that banks have given themselves the right to swipe money from our savings accounts should they feel the need. See:

It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors

Posted on March 28, 2013 by Ellen Brown (google Ellen Brown for more)

Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland; and that the result will be to deliver clear title to the banks of depositor funds.
Quote ends.

Does this apply to building societies? Would our money be safer with building societies than with banks?

Thanks

T.

Wasn't this done to death when the Cyprus situation first happened? Quantitative easing is a far more subtle and effective method of disadvantaging savers without causing the kind of out rage we saw in Cyprus.