Banks Don't Like Savers ..... Only Borrowers Please !

[Perfectionist]

http://www.telegraph.co.uk/money/main.jhtm...5/ixperson.html

Best Quote

"Lombard says it does not want to deal with savers any more. It wants to concentrate on borrowers - a sentiment, I suspect, that sums up the attitude of the whole industry"

[jonewer]

http://www.telegraph.co.uk/money/main.jhtm...5/ixperson.html

Best Quote

"Lombard says it does not want to deal with savers any more. It wants to concentrate on borrowers - a sentiment, I suspect, that sums up the attitude of the whole industry"

Of course. Whats the point in savers? You dont actually need to have their money before you lend it to someone else when you can just make money up all by yourself.

[OzzMosiz]

Guess they got the company started thanks to savers. Now bye bye we don't need you any more.

[Guest muttley]

The more savers the bank can attract, the more it can lend. Just don't expect any favours.

[Bingley Bloke]

http://www.telegraph.co.uk/money/main.jhtm...5/ixperson.html

Best Quote

"Lombard says it does not want to deal with savers any more. It wants to concentrate on borrowers - a sentiment, I suspect, that sums up the attitude of the whole industry"

And the government

[Guest mattsta1964]

The more savers the bank can attract, the more it can lend. Just don't expect any favours.

No so anymore

The old concept of fractional reserve banking where lending was proportional to monies held in reserve is pretty well non existant now

Banks just create more and more money out of thin air and lend it at interest.

The question we should all be asking ourselves is, if banks can create money out of thin air and lend it at interest, why can't a democratically elected government create money out of thin air but put it into the economy debt free?

Alot of people are asking this very same question

[Patience is a virtue isn't it!]

Personally I think it is the banks not the government that really are behind most of the problems we see at present, especially HPI. They have fall too much power, answer to nobody in particular and really control what happens out there.

They will either way, prices go up, they lend more and make money on the interest.

Prices go down, and they start repossessing property. The Banks in essence probably own half the houses in the U.K.

[Jason]

No so anymore

The old concept of fractional reserve banking where lending was proportional to monies held in reserve is pretty well non existant now

How so? Explain...

All the government would need to do is increase the reserves required by the banks, that will get them attracting savers once again.

[Patience is a virtue isn't it!]

How so? Explain...

All the government would need to do is increase the reserves required by the banks, that will get them attracting savers once again.

I don't think the Government really has that power anymore. The banks can hold them to ransom a lot easier than the government can push them around.

[Guest mattsta1964]

I don't think the Government really has that power anymore. The banks can hold them to ransom a lot easier than the government can push them around.

The political parties are themselves hopelessly in debt and at the mercy of the banks and financial institutions. That is why labour sells peerages to rich, powerful people. It guarantees their survival but democracy dies in the process. Now the political parties are enslaved by the system just like us.

[Realistbear]

http://www.telegraph.co.uk/money/main.jhtm...5/ixperson.html

Best Quote

"Lombard says it does not want to deal with savers any more. It wants to concentrate on borrowers - a sentiment, I suspect, that sums up the attitude of the whole industry"

This is simple a reflection of our society and the "Miracle Economy" in which we live. We have precisely the government we want: one that promotes greed, borrowing, irresponsiblility and deceit.

HPI-MEW are the vehicles that we as a nation have used to get where we are today. Gordon Brown is merely a facilitator of the collective desires of the nation.

When WE change the government and banks etc. will change also. For now, they cater for exactly what we want.

If we don't change the market has its ways of changing things for us and the laws of economics can be very unkind to nations who build their house on the shifting sands of borrowing and irresponsibility.

[Guest mattsta1964]

Personally I think it is the banks not the government that really are behind most of the problems we see at present, especially HPI. They have fall too much power, answer to nobody in particular and really control what happens out there.

They will either way, prices go up, they lend more and make money on the interest.

Prices go down, and they start repossessing property. The Banks in essence probably own half the houses in the U.K.

Congratulations. You have hit the bullseye

[Jason]

Do anyone know what Reserves banks need to hold? I think it's 8%, but am not sure.

[OnlyMe]

Lenders don't need the reserves, they are laying off the debt bet onto others. When the bet turns sour then the situation will change again, except there will not be the people with savings to underwrite anywhere near the level of borrowing required to keep the game going.

[Guest John Brown]

The Fractional Reserve Banking System

The privately owned high street banks do not lend out their saver's deposits as loans to those customers who wish to borrow. They never have. Instead these deposits act as a reserve on any calls that banks have on their money over and above the normal in-flow of funds. It is called their fractional reserve.

Instead of lending actual cash money to borrowers, the banks have only ever lent 'credit'. However, this credit is used by individuals to buy homes and to spend through their credit cards, overdraft facilities and arranged loans. It is also used to run businesses, to pay employees and suppliers, who further use it to run their own finances. Governments borrow it for public spending when income from taxation is insufficient.

This bank-created credit now forms some 97% of the British money supply (with similar ratios affecting all the world's major economies), and it has effectively become money. If a person borrows, say, £100,000 from a bank to buy a house, they regard that sum as money. It gets paid into the vendor's own bank account and they also regard it as money and spend it as money.

The amount of credit lent as a proportion of money held on deposit has always been a matter for nice judgement by the individual banks. The more they lend the more profit they make, but the more exposed they become, if too many customers want their money back in the short term. During the 18th and 19th centuries, private banks often collapsed due to a 'run on the bank'. Nowadays, the banking system as a whole tends to rally round to prevent any one bank collapsing, if only because they are all so bound up with each other.

So by the 20th century a figure of 15% was established as a suitably 'safe' exposure - the prudent fractional reserve. This meant that for every £100 that a bank had out on loan, it had £15 of savings held on deposit to cover the loan. This was the equivalent of a bank lending out each of its saver's deposits six times over. This was a fabulously profitable way of working, but it did at least impose a degree of constraint upon bank lending.

Bank de-regulation in the 1980s and the decline of the use of cash has ended even this modest constraint.

No Reserve

The use of cash has declined from 46% of the money supply in 1946, to 21% in 1972 and now down to 3% today, making this 15% 'safety' figure cease to have relevance. A reduction of cash to just 3% of the money supply suggests that the 'fractional reserve' of most banks has also fallen to a similarly low level. In other words, banks can and do lend to the amount of over 30 times their depositors' savings. To all intents and purposes, with such a tiny amount of reserve required and as cash is now so little used, there is virtually no restraint upon the amounts that banks may lend.

There certainly is no government control upon bank lending. The only influence by statutory authority is an increase in base interest rates by the Bank of England's Monetary Policy Committee when inflation rises, indicating too much money within the economy.

In recent years, despite the growth in the money supply, both interests rates and inflation have been at a very low level. This may be because, despite there being so much money in circulation, a large proportion is in use simply to pay the interest on the high level's of borrowing. It is therefore not available, as historically it would have been, to allow high levels of inflation to occur with 'too much money chasing too few goods'.

Bad Debts Rising

This natural curb on both inflation and interest rates, caused by the straight-jacket of high levels of borrowing, should not allow us to be complacent, however. The level of bad debts is rising steadily. At the time of writing it is estimated to be in the region of 20%. In other words, the banks are losing about £20 for every £100 they lend.

Given that the money that they lent was created out of thin air in the first place, it is money that they can afford to lose. It just means that their profits are a few billion pounds less each year than they would otherwise have been.

For the individual borrowers concerned, however, this difficulty with indebtedness is not so easily dismissed, for the banks do not allow them to walk away from their commitments without difficulty. Homes are repossessed; businesses go bankrupt; county court judgements are imposed; debt-collectors are set onto people; sleepless nights become common; marriages break-down; spouses and children become the subjects of physical and emotional abuse; suicide is contemplated and even attempted.

All this is because the culture of thrift has been swept a away in an orgy of irresponsible lending. Everywhere, lenders are falling over themselves to push borrowing down people's throats. People are urged to sign loan agreements that they do not understand, proffered by people whom they do not know, to borrow money that they cannot afford, to buy things that they do not need.

A Topsy-Turvy System

We have the most topsy-turvy credit rating system, wherein people with large amounts of debt are given good credit ratings and permitted to borrow more, whereas those who have a history of prudence, who have scarce ever borrowed before are given poor ratings and are penalised by high rates of interest!

This cavalier attitude on the part of the banks would be entirely curbed by the simple expedient of making it illegal for them to create money. Then they would have to very careful with the money that they lent out, as it would not have been created out of thin air. They could fulfil a useful and profitable role within the economy, but it would end their capacity to lend irresponsibly.

[Guest mattsta1964]

Do anyone know what Reserves banks need to hold? I think it's 8%, but am not sure.

The ratio is reckoned to be closer to 30:1 at the moment or about 3.3% A calamity in the making

[Mags]

http://www.telegraph.co.uk/money/main.jhtm...5/ixperson.html

Best Quote

"Lombard says it does not want to deal with savers any more. It wants to concentrate on borrowers - a sentiment, I suspect, that sums up the attitude of the whole industry"

Fine... may every Lombard saver withdraw their cash today.

[Realistbear]

When Japan finally raises the rates the printing presses will have to start rolling to flood the market with more money to get out of debt. Gordon will then have to move the goalposts for his "CPI" figures and re-configure the items in the basket again to make sure his tragets are met.

Prescott just got caught spending time at a ranch in Colorado that happens to be owned by the boss of a big casino project that is seeking permission to get a foot hold in the UK to lighten the load from peopl'e wallets. Time for them to all go I am afraid.

http://uk.news.yahoo.com/04072006/325/sex-...e-prescott.html

The Conservative Party has called for the investigation after it emerged that Prescott stayed at Anshutz's Colorado ranch during a visit to the United States last year.

Prescott acknowledged his meetings with Anschutz in a letter to Hugo Swire, an opposition Conservative politician who has called for a probe.

But Prescott said he did not have decision-making power over gambling licenses and did not discuss the Dome during the visit to the ranch.

[Guest mattsta1964]

This article is from the Money Reform Party website I think

There are some very interesting articles about how the entire money supply has been hijacked by the banks. It will bring down civilization eventually

The article on fractional reserve banking posted earlier

[Ignorant Steve]

Barclays like savers.

If you have over £50K saved with them they promote you to "Premier" and throw all sorts of good quality advice at you. They know they need to keep their better customers sweet.

You can also be a "Premier" customer if you earn more than £100K.

[Mags]

Barclays like savers.

If you have over £50K saved with them they promote you to "Premier" and throw all sorts of good quality advice at you.

'Good quality advice'? From a bank? From Barclays of all places? I don't think so!

[jp1]

The more savers the bank can attract, the more it can lend. Just don't expect any favours.

Get with the programme!

Banks dont need savers to provide the money they lend out [thats so last century!] they borrow it for nothing[0% IRs] from Japan

[Ignorant Steve]

'Good quality advice'? From a bank? From Barclays of all places? I don't think so!

As with all VI advice you clearly have to weigh it against other sources, but generally it's food for thought. It's free as well.

It's also nice to have a helpful personal banker at the end of a phone.

[Patience is a virtue isn't it!]

As with all VI advice you clearly have to weigh it against other sources, but generally it's food for thought. It's free as well.

It's also nice to have a helpful personal banker at the end of a phone.

I think that when you are earning the money required to qualify for a Premier Account you really should have more sense than to invest with Barclays.

Last time I went in they tried to convince me to invest in one of their tracker funds!! Why or why would you go with a fund managed by Barclays!

Their interest on any account (even their "super Saver" is truely woeful)

[Ignorant Steve]

I think that when you are earning the money required to qualify for a Premier Account you really should have more sense than to invest with Barclays.

Last time I went in they tried to convince me to invest in one of their tracker funds!! Why or why would you go with a fund managed by Barclays!

Their interest on any account (even their "super Saver" is truely woeful)

I don't invest with Barclays - I save. Which I thought was the point of this thread.

Cash savings are never going to give you a particularly meaningful return (especially after tax).

The overall package from Barclays is OK. (IMO).