Savers lose out on £44.5bn as Bank Rate stays at 0.5pc

[gingerjedi]

Ok, how about this - when money is deposited it can be lent out at anything 5-20% interest rate. Why do you think people who actually have the money don't deserve the payout?

If banks were only allowed to lend what they have attracted in savings the whole financial system would be far more stable - it would also encourage to save.

I see your point but I have no savings and a mortgage so I don't see why I would want to agree with you.

[AtW]

I see your point but I have no savings and a mortgage so I don't see why I would want to agree with you.

You have no cash in your bank account yet you can sleep well at night?

[Freamon]

Ok, how about this - when money is deposited it can be lent out at anything 5-20% interest rate. Why do you think people who actually have the money don't deserve the payout?

If banks were only allowed to lend what they have attracted in savings the whole financial system would be far more stable - it would also encourage to save.

Erm, banks are only allowed to lend what they have attracted in savings. And not all of it either, they have to keep a certain percentage in reserve.

It's the fact they can lend out the money that people have in their savings accounts at all that causes the problem.

The solution you're looking for is to only allow banks to lend out money that people have invested with the bank. Savings != investments.

[AtW]

Erm, banks are only allowed to lend what they have attracted in savings.

[Freamon]

Ignorance is bliss, in your case.

[AtW]

Ignorance is bliss, in your case.

Do you know the difference between "savings" in bank balance and "loaned" money?

[gingerjedi]

You have no cash in your bank account yet you can sleep well at night?

You have cash in a bank account and you can sleep at night?

[AtW]

You have cash in a bank account and you can sleep at night?

Now that you've mentioned it - NO!

[Freamon]

Do you know the difference between "savings" in bank balance and "loaned" money?

Yes, but clearly you don't understand, so I'll have to explain in very simple terms.

Person A deposits £100 in savings in Bank X.
Bank X can now lend Person B £90 and has to keep the remaining £10 in reserve.

Person B goes to a shop and spends the £90, shopkeeper deposits the £90 in Bank Y.
Bank Y can now lend Person C £81 and has to keep the remaining £9 in reserve.

And so on.

At no stage is any bank able to lend out any more than it has received in savings..

Simple enough for you?

[AtW]

Yes, but clearly you don't understand

I actually do understand, it is you who confuses savings with debt that some unnamed banks loaded themselves up using foreign markets.