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MSE News: Savings protection limit set to return to £85,000
Comments
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When the limit was reduced, most (if not all?) banks and building societies allowed folk who would be over the reduced limit a one-time, penalty-free withdrawal of up to £10k from bonds that were otherwise fixed term.
As nothing actually happened, they could have done nothing, and have £85k earning the higher interest, instead of £75k.
"Please sir, can I put £10k back and get the nice interest rate again?" :rotfl:0 -
If the banks are as strong as they like to think they are there should not be any limit.
We keep hearing hardly anyone has much more than £75k, then all the more reason for no limit.0 -
If they were sensible it seems far more likely that they can get a higher rate on the £10k than they'd get on £85k!As nothing actually happened, they could have done nothing, and have £85k earning the higher interest, instead of £75k.
"Please sir, can I put £10k back and get the nice interest rate again?" :rotfl:Remember the saying: if it looks too good to be true it almost certainly is.0 -
If the banks are as strong as they like to think they are there should not be any limit.
If your money in the bank was 100% guaranteed they would not need to pay you interest. In fact you would pay them for the convenience of having bank cards and the security of protection from fire and theft. And the FSCS wouldn't cover banks whatsoever - the limit would be £0. It would be a gross unfairness to force banks to pay towards a compensation scheme that they didn't need because they never went bust.
The purpose of the FSCS is to allow people to feel confident in leaving their money with banks instead of under the mattress and thereby to enable modern civilisation with its contactless cards and Direct Debits to function. Not to save lazy rich people the bother of spreading their money around sensibly.0 -
I'm sure the bank's can't wait to update their literature and web sites and chop down thousands of trees to send out tens of millions of letters to customers advising them of the change.
Especially those with balances that used to be c£85k who they allowed to move funds just a few months ago when limits were lowered.0 -
Having said that, since NS&I are offering one of the best instant access rates at the moment, the protection is relatively meaningless
This is the ironic thing, the government through NS&I are backing your money up to £1 million per person.
The banks who are being fed cheap taxpayer`s money don`t really want to guarantee your money,or indeed want your money at all.
The greedy banks were the ones, through their recklessness, brought the country to it`s knees for which we are all still paying the price.
The government should not be using taxpayer`s money to subsidize banks at a cost to savers.0 -
That's right, the government should not have tried to prevent future reckless behaviours by increasing the capital requirements of banks. And then they wouldn't have been faced with banks less willing to lend to small businesses and would not have needed to try to influence the banks' behaviour by incentivising their lending to businesses through offering cheap capital.The greedy banks were the ones, through their recklessness, brought the country to it`s knees for which we are all still paying the price.
The government should not be using taxpayer`s money to subsidize banks at a cost to savers.
Instead they should just hope that banks forget that they have a profit motive, and voluntarily offer lower lending rates to stimulate the economy.
The banks won't happily give up any thoughts of profits though, because without the prospect of profit there is no point them existing.
To preserve the profits, they could happily lend out and stimulate the economy and subsist without government funding, by offering lower borrowing rates of their own accord, funded by increased account operating charges and by offering lower deposit rates to customers?
I'm sure that will get you the result you are looking for, right?
If you think it is so easy to run a bank, why not try and start one? You'll quickly find you need a monstrous amount of capital which an investor will want a return on. And you'll need to make more revenue net of costs, if you want to be able to make the funding commitments to an unlimited deposit guarantee scheme for a minority of customers. You could do that by increasing charges and reducing deposit interest rates.0 -
bowlhead99 wrote: »That's right, the government should not have tried to prevent future reckless behaviours by increasing the capital requirements of banks. And then they wouldn't have been faced with banks less willing to lend to small businesses and would not have needed to try to influence the banks' behaviour by incentivising their lending to businesses through offering cheap capital.
Instead they should just hope that banks forget that they have a profit motive, and voluntarily offer lower lending rates to stimulate the economy.
The banks won't happily give up any thoughts of profits though, because without the prospect of profit there is no point them existing.
To preserve the profits, they could happily lend out and stimulate the economy and subsist without government funding, by offering lower borrowing rates of their own accord, funded by increased account operating charges and by offering lower deposit rates to customers?
I'm sure that will get you the result you are looking for, right?
If you think it is so easy to run a bank, why not try and start one? You'll quickly find you need a monstrous amount of capital which an investor will want a return on. And you'll need to make more revenue net of costs, if you want to be able to make the funding commitments to an unlimited deposit guarantee scheme for a minority of customers. You could do that by increasing charges and reducing deposit interest rates.
I think that post has somewhat missed the point.
I'd agree that it would be very difficult and expensive to start a bank and I wouldn't want to; however the issues with the banks nearly a decade ago were created by employees, not theor owners or shareholders, with a Mis alignment of bonuses in relation to risk in selling and lending incentives, so that the bank employees benefitted and the owners lost out.
The senior management was sufficiently poor not to be able to manage or foresee this situation and the split of profits made between employees and shareholders was massively biased towards the former with the latter taking the risks and liabilities.
Interestingly watched the film the Big short for the first time over the weekend, nothing rebolutionary in its content and it's obviously dramatised but an interesting review of events leading up to the gfc from a primarily us perspective.0
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