Perhaps I'm being thick but the Bof E won't reduce interest rates because of the threat of inflation. I do appreciate there are problems in the world economy basically due to smart B's in the markets getting involved in securitised debt - basically selling on Junk grade mortgages.However, in the UK, Banks who caused the problems are stiffing their customers with higher charges and bigger interest differentials to improve their profits, which by the way they are still making!! This means that the general public end up paying for the dividends to the banks investors through those increased charges.
At the same time, foreign owned utility companies are being allowed to use the UK as a Milk Cow to screw the consumers and keep the prices down on the continent. This reduces the money going into the hands of the public but is classed as inflationary.Council tax is increased as the gov is putting less in. I have less, the big businesses have more so why not tax them and reduce interest rates?
I am an ex Bank Manager and financial analyst so I know losses have been made due to their greed but profits are still being made and the charges are rising. If you want to change morgages, HSBC for example now have a "fee" of £1999 for new mortgages - one small example but I could go on.
PS. I know its complicated but the public in essense are paying for the banks greed in overlending to people with little chance of repaying. I used to advise the board of one of the UK's major banks and that lending would never have been allowed 10/15 years ago. Thats why their lending methods are being examined now. Northern Rock? - good example of lending that should never have been allowed.
RBS board reporting to the local directors. I was also on their defense team when HSBC tried to take them over - my job was to assess HSBC's accounts so I think I was reasonably well qualified. I am a qualified IFA and Stockbroker with the Banking exams.
Bank fees have gone up enormously and do not relate to the actual cost.
You refer to the cost of borrowing money? This is within the difference between their lending and deposit rates or do you think this is incorrect? Look at the multiples they are allowed to lend against deposits. Please let me refrain from mentioning the credit card rates and onerous lending rates to anyone lower than blue-chip.
Sorry my friend but I think you are talking utter tosh. Northern Rock borrowed short and lent long which was a disaster waiting to happen. It was greed that pushed them in that direction.
I was not in fact involved in any fast growth schemes. They are mostly a recipe for disaster if you cannot bring in reasonable immuniosation.
There is Risk and there is utter foolhardy Risk. The higher the risk, the higher the reward. However, the directors of NR allowed the lending controls to be too lenient and the other banks are now getting their fingers burned, albeit at a lesser heat, as a result of poor credit control.
You obviously do not understand the need for control and dicipline where lending is concerned. The world does indeed go round in cycles but recent history is evident that there are too many people failing to follow prudence rules when its necessary.
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