Bankers

[AtW]

They are borrowing the money so the rate that they can lend at depends on the rate they have to pay, which is not the BofE rate.

Yes, interbank rate is much higher than BoE rate, however if the system was working properly that would mean that banks would be interested to attract people's savings at rate below that interbank rate, what we see here however banks refuse to do that and pay 0% now (unless you commit to 3-5 years but that's just silly proposition).

[Gonzo]

The real annoying part is that they pay savings rate of now 0% but still lend at 5-7% on low risk type of debt, a lot more on higher risk, and instead of rebuilding balance sheets they just use those profits to pay themselves usual bonuses.

The banks don't work like this any more Alexei. They are not lending out savers' money and keeping the difference between the two rates like they did in the olden days. They are borrowing the money so the rate that they can lend at depends on the rate they have to pay, which is not the BofE rate.

It is not low risk either. If people are not defaulting on their payments it is all well and good. Even if they are and the property is worth more than the amount owed then it is still OK for the bank.

But when the property is worth less than the amount owed, then the bank is in the tulip. With the excesses of the 100% mortgages and falling property values, the banks are in the tulip.

Where I am now they think they have avoided the worst of the bank issues seen in other parts of the world because they were more conservative, 20% deposits were still the standard. Property prices have fallen by less than 10% from their peak a couple of years ago and everyone thinks that it will all be OK.

I am beginning to think that they are deluding themselves.

I am at a retail bank at the moment and this week I saw some mortgagee sales come in and in all the cases the amount the properties sold for was only about 60% of the lending that is still outstanding. I will have to do a bit more digging to find out if this is normal or noteworthy though.

I have seen plenty of evidence that what people did as their properties rose in value was to borrow more and more against them. I was looking at imaging documents a few weeks ago and the examples of loan agreements that I saw showed that people were taking out new loan agreement after new loan agreement every 12 months or so supported by the value of their house going up.

I know of one pair of pensioners who have gone through bankruptcy and someone thought it would be good business to make unsecured loans totalling the average annual salary here to people whose only income was their state pension.

I am not convinced that they have been conservative after all. It will end in tears.

[HairyArsedBloke]

Get a current account with a building society, they're probably not an awful lot better charge wise but at least the staff won't be filling their boots at your expense.

I think this is the best thing for 99% of people.

I (HAB not HAB Inc) only have a building society account (Nationwide) in the UK. Does everything I need; even the international stuff.

[d000hg]

The real annoying part is that they pay savings rate of now 0% but still lend at 5-7% on low risk type of debt

Are you familiar with the concept of a bank? It's not a public service...

[Shimano105]

Because these days he's one of the sane ones! Jeez, the bedwetters around here.

[xoggoth]

Not taking the p* out of ATW? What the matter with you man?

[Shimano105]

Spend it all instead. Banks are now in full-on robbery mode (don't forget all these luverly cuts as well, that are to pay off the bail-outs).

You are part way there by renting, thus not buying into the home ownership ponzi scheme (i.e. interest payments).

I'm not taking the p* by the way, I'm one of the few that admire your rental approach.

[gingerjedi]

Get a current account with a building society, they're probably not an awful lot better charge wise but at least the staff won't be filling their boots at your expense.

[AtW]

I take the easy road and don't read any of it ,but assume they are out to rob me.

The real annoying part is that they pay savings rate of now 0% but still lend at 5-7% on low risk type of debt, a lot more on higher risk, and instead of rebuilding balance sheets they just use those profits to pay themselves usual bonuses.

[TimberWolf]

If you read the small print, about 3/4 of the way down the 8th page of carefully prepared boring stuff, it'll say they can take away the overdraft limit any time they like and make you pay up the difference. There's probably a lot more small print like that in the agreement, if you can decipher the obfuscated passages and have extreme patience. I take the easy road and don't read any of it ,but assume they are out to rob me.

[SofaKingdom]

Got home and found helpful communication from bank about my account:

1. New minimum £5 monthly fee for overdraft usage

2. Bank will generously provide first £10 of overdraft that won't count as unauthorised

3. "Changes to interest we pay you": they will no longer pay interest on money in current account, currently they pay 0.1% but clearly they think even that's too much!

Withdraw your life-savings, put them back in the piggy-bank your mum gave you, put it on the kitchen counter of your bedsit and stop worrying about things you can't control.

[AtW]

Got home and found helpful communication from bank about my account:

1. New minimum £5 monthly fee for overdraft usage

2. Bank will generously provide first £10 of overdraft that won't count as unauthorised

3. "Changes to interest we pay you": they will no longer pay interest on money in current account, currently they pay 0.1% but clearly they think even that's too much!