DYSFUNCTIONAL BANKING – DOESN’T THAT MEAN CORRUPT BANKING ?

According to the New Economics Foundation a dysfunctional financial sector led us to the brink of disaster in 2008, and yet bank reforms aren’t going far enough to tackle the root causes of the economic crisis. The New Economics Foundation goes on to explain our four big banks remain too big to fail, and continue to engage in the risky and unproductive activities that caused the crash. We need to establish a more stable, sustainable and socially useful banking system.

Key Facts

The UK government pledged 89% of GDP to bail-out out our banks.

45% of Americans are members of their local credit union, compared to 2% of Britons.

The UK banking sector is one of the least diverse in the developed world – local banks make up just 3%, compared to 67% in Germany and 34% in the USA.

Read more from the New Economics Foundation about the dysfunctional financial sector here

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BOZ  THINKS THE NEW ECONOMICS FOUNDATION PROBABLY REALLY MEANT TO SAY………..

– All the banking problems are caused by the stranglehold, or monopoly, banks have over absolutely everyone – the Government, businesses and all individuals.

– This allows the banks to become increasingly extortionate by constantly increasing the boundaries of what they charge to their customers for handling any kind of  financial transaction and also increasing rates of interest they charge for lending money.

– As they set increasingly higher boundaries for all their charges and discover they get can actually get away with it, they also become more confident in justifying increasing bank employee ‘bonuses’ to completely obscene levels on the basis the employees made all that extra profit for the bank, therefore they deserve to get a percentage of it.

– But that also just encourages bank employees to constantly invent new ways of charging bank customers even more money as well as perpetually increase bank lending as much as possible at all times, thus making it more and more risky, dangerous, often misleading borrowers and even behaving fraudulently and downright dishonestly.

– If you look at the interest rates bank customers were paying for overdraft, or credit cards and so on about forty years ago, the rates were vastly lower than they have been now and in the past two decades.

Some bank charges today are just obscene – just look at overdraft rates at least twice as high as they used to be and credit card interest rates even higher than twice as much as they used to be, now  hurtling past 30% and surreptitiously sidling up towards 40% and all this at a time when the Bank of England  base rate has been it’s lowest in  how many hundred years ?

– If there were lots of small banking type businesses taking in customer’s money, giving them  attractive rates of interest while making sure the savings deposited were always safe, and then using those savings deposits to lend safely, reliably and carefully to small businesses and individuals, all these smaller banking operations would reduce and hopefully completely destroy the ruthlessly extortionate  monopoly of the current banking system.

– But this can’t happen because the morass of controlling regulations and bureaucracy the banks have connived at conjuring up in conjunction with the official, Government inspired regulatory authorities which were supposed to be there to help the customers of the banking system and make sure their money was looked after safely, honestly and carefully.

In fact all this regulation is cunningly used by the existing banks to stifle any possible competition by preventing anyone else from setting up a rival bank to challenge their predatory behaviour towards bank customers.

– My oh my and haven’t those industrious little dears at the regulatory authorities been ever so busy during the past century or so !

Apparently, there has only been just one new High Street Bank license granted by them in the last 150 years !

– That’s a bit funny when there are only about five banks  controllinng the entire UK market  and there is such a desperate need for probably hundreds of small, local banks, isn’t it?

Are the regulatory Authorities  just bureaucratic lunatics or have they just been stuffed with people who used to work, or even still do work within the existing banks ?

Whatever the answer is, Does that actually just mean the system is completely corrupt ?

I think so . What do you think ?

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