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porca misèria

Starting A New Bank

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Radio 4's "in business", right now.

Apparently lots of people are contemplating starting new banks, and some credible voices saying it's a good time for it. They just interviewed someone who founded a microlending bank with no banking background, and he came up with a real gem: when faced with a challenging decision, he looks at what the conventional banks would do, and does the opposite!

/me suspects a few HPCers might be interested :)

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Radio 4's "in business", right now.

Apparently lots of people are contemplating starting new banks, and some credible voices saying it's a good time for it. They just interviewed someone who founded a microlending bank with no banking background, and he came up with a real gem: when faced with a challenging decision, he looks at what the conventional banks would do, and does the opposite!

/me suspects a few HPCers might be interested :)

Now talkin' 'bout HPC's favourite bank (Zopa) - "it's back to the origins of banking".

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Radio 4's "in business", right now.

Apparently lots of people are contemplating starting new banks, and some credible voices saying it's a good time for it. They just interviewed someone who founded a microlending bank with no banking background, and he came up with a real gem: when faced with a challenging decision, he looks at what the conventional banks would do, and does the opposite!

/me suspects a few HPCers might be interested :)

Girobank was of course flogged-off under the Conservative privatisations schemes to Alliance and Leicester, which was swallowed by Santander, who now wish to run Essex's banking services.

Here we go again!

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I've been thinking about this for ages. Established banks have loans out against over prices assets so they need to charge a premium for their loans to build up reserves for the inevitable write downs.

New banks on the other hand are not encumbered by past mistakes - so they can offer better savings rates to attract capital and lend out at slightly better rates.

So why is everyone not doing it?

Anyone want to get together?

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I've been thinking about this for ages. Established banks have loans out against over prices assets so they need to charge a premium for their loans to build up reserves for the inevitable write downs.

New banks on the other hand are not encumbered by past mistakes - so they can offer better savings rates to attract capital and lend out at slightly better rates.

So why is everyone not doing it?

Anyone want to get together?

Guarantee me 6% insured with profits taxed at 18% capital gains instead of 40% income tax and I might be!

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Guarantee me 6% insured with profits taxed at 18% capital gains instead of 40% income tax and I might be!

any rate above "risk-free" is risky and cannot be guaranteed by definition. DB offers a sterling total-return ETF which increases in line with SONIA, so no income tax, just CGT. O/N rates are pretty crappy though.

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I've been thinking about this for ages. Established banks have loans out against over prices assets so they need to charge a premium for their loans to build up reserves for the inevitable write downs.

New banks on the other hand are not encumbered by past mistakes - so they can offer better savings rates to attract capital and lend out at slightly better rates.

So why is everyone not doing it?

Anyone want to get together?

Happy to, if I see a credible plan. Could even take some time to hack up the online presence (the functional bits; need folks with different talents to prettify it, and sit behind it in customer-facing places).

But I suspect the real opportunities are for those with existing customer-bases and big footfall. That is to say, those like Tesco, Sainsburys and M&S, who have already dabbled a little but not built big portfolios of junk.

Edited by porca misèria

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I've been thinking about this for ages. Established banks have loans out against over prices assets so they need to charge a premium for their loans to build up reserves for the inevitable write downs.

New banks on the other hand are not encumbered by past mistakes - so they can offer better savings rates to attract capital and lend out at slightly better rates.

So why is everyone not doing it?

Anyone want to get together?

Because the govt has made sure established banks arent encumbered despite making every bad decision possible!

Unfortunately, the days of the free market, and risk/moral hazard premiums having a bearing on lending are long gone.

If anyone tried to create a sustainable and responsible banking system the govt would find a way to stop it. Its what they do. Its why they exist. They need a ponzi banking system to create the illusion of growth (inflation), or something along those lines.

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I've been thinking about this for ages. Established banks have loans out against over prices assets so they need to charge a premium for their loans to build up reserves for the inevitable write downs.

New banks on the other hand are not encumbered by past mistakes - so they can offer better savings rates to attract capital and lend out at slightly better rates.

So why is everyone not doing it?

Anyone want to get together?

This is something I'd look at. I have been looking at supporting a credit union, but I don't see anything wrong with a more ethical bank.

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But I suspect the real opportunities are for those with existing customer-bases and big footfall. That is to say, those like Tesco, Sainsburys and M&S, who have already dabbled a little but not built big portfolios of junk.

I expect Tesco to be the country's biggest retail bank within 10 years.

Ultimately all most people want is a current account to park their salary in while they spend it and a savings account giving a reasonable rate of interest. Tesco and the other supermarkets have the infrastructure and customer base in place in order to provide these simple services and make a profit on them. They also have phenominal positive cash-flow.

And no historical crap...

Edited by Mr Yogi

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