Quote:
Originally Posted by entwisi
Why should a global company give preferential rates to british borrowers and savers? There are few 'UK' Banks now. In order to protect themselves from hostile takeovers it was necessary a number of years ago to become Global organisations. Barclays has a large prescence worldwide and is driving the increase in Banking in places in Africa and India bringing bank accounts to millions of people who have never had access to such services.
The vast majority of the Toxic debt you refer to is not UK loans to to foreign investors. The majority is American Sub primes watered down with other debts in packages sold on and on and on till its lost its identity.
Individuals has been foolish buying on cheap credit with no idea of what would happen during a down turn. It was a fact that in one year BMW sold more 3 series cars than Ford did Mondeos, now that is a crazy situation. we were all being sold a 'lifestyle' and no one bothered to think if they needed it or not. I'm fortunate that I was brought up with little money to hand so even though I'm fortunate to have a very well paid job I don't see the point in 'wasting' money for no reason. I could/can afford a brand new car if I wanted but I know that due to teh mileage I do it would be worthless in 4 years. I can't see the point in throwing 15-20K down the drain when I can do the same journeys for less than 5K. So I drive what some would term an old banger, who cares? I'd rather put my money into appreciating assets than depreciating ones! As such I'm looking to be in a position to be able to choose to retire when I hit 55.
People have been enjoying holidays, cars, flash goods etc on 'equity' on a house that was only really a false number driven up by the availability of cheap credit. Now its a reality that negative equity if likely to cause a fair amount of pain.
There isn't a Bank on the planet that has 'forced' anyone to borrow money. Its your own responsibility to work out if you a) need it b) can afford it and c) should do it!
I also fail to see why Banks are seen as something different to every other business in the land. They are busineses, there to make a profit( for shareholders or whoever). If they were too expensive they wouldn't have customers just like you don't pay over teh odds for anything else you buy. IN fact I would even venture that for Mr Average he gets a VERY good deal out of his Bank. They look after your money, pay you interest for savings, provide you at great cost with Cash Machines, branches, debit cards and the infrastructure so that you can spend your money in any number of places. how much does all this cost you? NOWT if you stay in credit. That to me has to be the bargain of the century.
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If they are prepared to take British Taxpayers cash to keep them afloat then they sure as hell should be prepared to put the British Ecconomy above all others. I dont think it will be too far down the line before Barclays are availing themselves of this support either. Protecting themselves against hostile takeovers all seems a touch irrelevent now! The Toxic Debt that banks have bought are loans and loan guarantees that have been bought against Foreign investments. It does'nt matter how diluted some of these debts have become, in fact their dilution just emphasises the extent that some banks have gone too in order to disguise their greed and incompetance. As you mention with individuals...nobody forced anybody to take on debt. Well nobody forced the banks into these unsustainable deals either. For the most part, they did'nt understand the level of risk they were exposing themselves and us to. They need to learn from this and stick to things that they do understand. Whats the old saying " If something looks to good...then it probably is" But Greed took over i'm afraid.
The Cheap Credit that has been too readily available....now remind me who it was that supplied that?? Yes, you are right to say that people should never borrow more than they can afford to repay, but we all know human nature, and how gullible we can be when confronted by a Silver Tounged salesperson. If the Banks themselves thought the Good times were going to continue, then surely the man in the street is going to be influenced by this....and if the banks did'nt then why saddle themselves with unnessesary risk? When i got my Mortgage (Thankfully Paid Off now) a 10% deposit was the norm, and you really had to convince the lender why they should lend to you. Recently we've seen 125% mortgages literally thrown at people, now it was'nt customers twisting the Banks Arm, or overvaluing their own properties that brought that about, it was the nice commision fees involved. Of course some individuals have been foolish...but the Banks and Fund managers much more so. They are supposed to be the experts who understand the finnancial systems, we look to them for expert guidence..we've seen precious little of that. I would'nt know the figures, but i would assume that individual debts on Credit Cards only make up a small proportion of the total debt we are looking at, yet the banks would like us to think its mainly our fault. A lot of the Foreign debt is being written off by the Banks, will the same happen with a lot of small British borrowers...no they will be hounded by the banks....sometimes to the Grave...and beyond! As far as the great cost of Cash Machines goes, one of the reasons they were installed in the first place, was to save banks money by hopefully employing less counter staff...in fact i can actually recall some banks saying at the time, that they might decide to implement a small charge for people who wanted to withdraw funds over the counter instead of using them. The Banks have done very well over the years making money off OUR money, most people have at some point had a mortgage as well as savings with them, along with buying other products and insurances (Often with highly inflated premiums), so the concept of totally free banking is a bit misplaced. Yes everyone expects, accepts and understands that Banks need to be profitable. But how about accepting their part in the troubles we now face, and realising that great change needs to be made to how they operate.
Best Regards - Taggy