It has long seemed to me that as interest rates have been forced to a ludicrous 40 year low, there is no real reason to keep money sitting in a bank as once the government appropriates a chunk of the pitiful interest on your cash, you might just as well have it stashed under your bed.
The rational view is that rather that seeing a bank as intermediary to invest your money for you, it is really just a glorified piggy bank… a supposedly safe place to invest your money. But then when you add in the fact retail banks go out of their way to pile on service costs and pull such ‘fast ones’ as taking up to four days to clear cheques (thereby pocketing a few days interest on the uncleared funds), when in reality they are capable of clearing the transaction before you have walked away from the counter, it is hardly surprising that retail banks are hearing the first rumblings of a consumer revolt.
I have always thought consumer boycotts were splendid things but quite why the inane Independent Banking Advisory Service (IBAS), a bank consumer group, is calling for a windfall tax (free registration required for link to ERisk Portal) on banks as a result is not so clear.
[Eddie Wetherill of the IBAS says] Nobody can understand how charges are calculated or precisely when they apply. The banks appear a law unto themselves.The Government has made fancy promises to be the consumer champion, but in reality it appears to have been in the pockets of the banks. We are calling for a windfall tax. They have ripped off the public and ought to be paying back £5-10 billion. We have seen ten years of plundering.
And as a consumer of retail banking services, exactly how do I benefit from having the government help itself to the bank’s funds? Does Wetherill think the state is going to appropriate £5-10 billion from the banks and then dole it out to retail banking customers? How idiotic. The government already takes a great deal more of my money that my bank ever has and any ‘windfall tax’ is just going to make the bank a less solvent less secure piggy bank without helping me one iota. With ‘friends’ like the Independent Banking Advisory Service, who needs enemies?
