Banks. Bankers. They are pretty much guaranteed to get a person hot under the collar before a sudden outburst of expletives. Some say it wasn’t the banks fault that the credit crunch happened. Some say it was politicians who caused it. Some say it doesn’t matter who did it lest just get rid of them all anyway. We all know who suffered and had to pick up the pieces. That would be you and me and all manner of other people just quietly trying to get on with their lives.
Banks have been a pain for a very long time. My first job was in a bank and it didn’t take very long for me to realise that the banks were very happy to keep their customers in the dark. The less they knew about the system the more profit the banks could make. Deposit accounts were very popular back then and it was a lot harder to get at your actual cash. You had to go into a bank, or more accurately the branch where your account was. If you wanted cash from another branch they would phone your branch to make sure you were you and that you had the money your passbook said you had. Far from ideal.
Cash machines and direct debits were just starting and having a cash card was really a privilege. As an employee you were given a cash card, cheque card, cheque book and a current account. If things got tight at the end of the month you just paid a cheque in from one of your mates and he would pay a cheque in from you a day or so later which kept you both in credit and you could repeat it or even add in other mates. It was called “crossfiring”. We didn’t do it a lot but we did it when we had to.
A group of bookies actually did this for real and they kept it going for months. Then of the inevitable happened, one of them didn’t pay in a cheque to the next one in the chain and it all came tumbling down. I’m sure it went to court. People were spanked in public for it.
Who would have thunk it? The banks were doing the same thing on a giant scale! Big mess when their version went down the tubes mind you. Big mess.
I paid a cheque into my bank account last week. It was a cheque from my bank to me because I’d complained about their service and they’d failed to sort it out within the time allowed. A whole £25 but hey it’s spendable right. I went into my branch and paid it into my account. The teller lady told me it would take 4 days to clear! It was the same bank. Why would it take 4 days? I asked. That was just what it took to clear. She did say they were trying to get this down to one day. Really?
Back in the mid-seventies it took 3 days for a cheque to clear if it was a Scottish bank and 5 if it was an English bank. I’m sure it was the opposite in England. Pay cash into your own account at your own branch in some banks and the money isn’t in your account until the next day and it used to happen immediately. Now we have more technology than you could shake a very big stick indeed at and it takes longer? No it doesn’t the banks just make it take longer so they can hold onto peoples money. I knew a guy who started work at 4:00 every Friday afternoon and finished at 8:30 on Monday morning. He worked in a building in a square in Edinburgh. His job was to use the money the bank had on deposit and lend it out to other banks since the customers money wasn’t going anywhere at the weekend.
The government was supposed to be encouraging this all to stop and for clearing to be immediate. The banks say it will take a lot of investment to make that happen. They were given longer to do it and they still haven’t.
The OFT was going to take them to task because of the penalty charges banks were using to generate profits. The timing was all wrong though. The OFT went to court not long after the crash and there was no way the government could allow the OFT to succeed. It would have cost the banks billions at a time that the taxpayer was giving them billions.
Whether the banks were responsible for the crash or not they need to be reigned in. They are just like Dick Turpin as things stand (and deliver) now!