/ Money

Let down by the banks? It’s time for a Big Change

Five years on from the start of the credit crunch, almost three-quarters of people don’t think that the banks have learnt their lesson and only one in ten believe that bankers act in our best interests.

We thought we’d seen banking at its lowest point when the public were forced to bail out the banks but since then we’ve seen the Libor rate-rigging scandal and continued mis-selling. All the while the bankers who presided over corruption continue to enjoy hugely inflated pay and bonuses.

The ‘Big Change’ campaign

Consumers are continually being short changed – we need to see Big Change in banking now. We’re setting out three simple asks to kick-start this change.

Customer service should come before sales, standards and ethics must improve, and bankers must be held to account. We want banks for customers, not bankers.

If we can achieve these three goals we’ll go some way to restoring the public’s faith in the banks. And so for the detail:

Bankers should put customers first, not sales. We want pay and bonus schemes introduced at all levels within banks to prioritise customer service not sales.

Struck off for malpractice

Bankers must meet professional standards and comply with a code of conduct. We want professional standards to be enforced in the banking industry. Like in the medical profession, staff would have to adhere to a code of conduct and they could be struck off for malpractice. Bankers at the most senior levels should have compulsory qualifications and training in ethical behaviour and resolving conflicts of interest.

Bankers must be punished for mis-selling and bad practice. We want senior executives held accountable for mis-selling and poor conduct, and stronger criminal sanctions – all the way up to board level – if they have presided over corrupt practices. Bonuses should also be clawed back in the event of mis-selling.

Pledge your support for Big Change

The government has set up an inquiry on banking standards that will provide recommendations on how the industry needs to change. You can help by pledging your support for the Big Change campaign and asking your friends to do the same. Let’s tell politicians and the industry that banks should be for customers, not for bankers.

We’ll be holding a consumer event with the inquiry’s members on Monday 24 September. If you have a question that you’d like the panel to answer, post it below. We’ll be posing your concerns to the panel on the night and posting their responses below.

Colin Amos says:
7 November 2012

The main banks are not the only ones who need to put their house in order. Nationwide, hitherto rated highly by Which?, are giving me an absolute run around. They seem totally incapable of grasping my complaints and dealing with them efficiently and effectively. I am rapidly reaching a peak in frustration and pretty soon I shall vote with my feet. A shame after at least 30 years of banking with them.

Hi Colin
You have just confirmed what I wrote in a previous post
The Nationwide is being pushed in this thread as being different to the mainstream,they are not
They used to be, but market forces have made them no different to the rest
I also voted with my feet.

Archie Honeyman says:
8 November 2012

Good on you. Get into them. Show the banks what for.

Adrian McTiernan says:
23 November 2012

Here, here! – Put the boot in – (nicest possible way, of course) – yes, vote with your feet, or perhaps more to the point, with your money. More power to the people, and all that sort of rot –

Tatto says:
8 November 2012

A few years ago Ryanair and a few others introduced “cheap no-frill” prices for flights.
Since then they try to push down the travelling public’s throat all sorts of inferior frills at high prices, making their cheap flights not much cheaper than proper ailrlines’ prices.

We should try to avoid using such airlines who, I believe dishonestly, appear to be cheaper than they really are, as well as making it very inconvenient for the passenger.

Never mind looking for transparency in banana pricing. We need to do the same with these airlines too!


saltydog1 says:
29 November 2012

I agree that Ryan air and lots of other organisations are a shower of crooks motivated only by greed and operated by people who know the price of everything and the value of nothing and I totally support your observations. However I also feel that it is outside of the remit of a banking comment board to include anything else. The banks are a cabal of organised criminals and it is a mystery why several of their managers and executives have not been prosecuted for fraud.

Stephen Lawrence says:
9 November 2012

We will have confidence in the banking system when we understand what banks do. Isn’t it interesting that money is about the only thing we are prepared to buy (into), without the faintest clue as to what it is, where it comes from, and why it is worth anything anyway? The Big Change is a start of a process of ‘banking enlightenment’ which may take many years, even a generation, to bring about that understanding.

Ronald Stamper says:
11 November 2012

Stephen Lawrence, As you say, there are basic facts about money that everyone should know. One of them is the most amazing secret because it is hardly ever broached in the media – that is until recently. On your topic Henry Ford said this

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

One of the few accessible sources is the website of a recent group called PositiveMoney. Google them. I find them excellent. They campaign on the creation of money by the private banks (97%) rather than by the state, on our behalf (3%). This lies at the root of boom and bust.

In the 1930s economists at U. of Chicago proposed ending fractional reserve banking that allowed this to happen. Of course the banks are reluctant to return the power to create the money supply to the state, where it began and where it belongs. The IMF’s Research Dept recently published a report called “The Chicago Plan Revisited”, which finds strongly in favour of that reform.

Everyone should know the facts.

Just imagine ! We allow banks to create 97% of the money in circulation from nothing but keystrokes on a computer keyboard when they lend it. Very roughly £2 trillion are in circulation now, and (what’s the average interest rate on loans today?) fill in a figure; do the arithmetic; then gawp at the size of the corporate welfare we hand to the banking sector.

Brian says:
11 November 2012

Ronald Stamper explains various theories as expounded by economists. As I [an ex and qualified plian vanilla banker] have said several times before in this ongoing debate, the solution is very, extremely and amazingly simple. Allow banks to be run by bankers. Not by economists or accountants or marketeers or by traders; please revert to having qualified bankers on boards of banks both non-executive and executive. Simple solution to a complex problem which is largely complex due to inter-meddling by non-bankers whose sole motivation is to produce bottom line profit [at all costs] and therefore be driven by the whims and fancies of shareholders. In my era as a banker [1964 – 1997] shareholders bought bank shares and hung onto them. They did not trade in bank shares. There was a strange sense of loyalty by shareholders then which is possibly why targets re profits were not in existence. Targets [and therefore bonuses] are the bad feature of banking and somehow there needs to be an end of this type of culture.

Adrian McTiernan says:
23 November 2012

I saw a most amazing film on the source of financial problems, and how we the public can solve them. The film is called ETHOS, and is commentated throughout by Woody Harrelson – excuse spelling. The thing we need to do is to use our money wisely, but how to do it is covered so well that to explain is but to cloud the issue. Please watch it – many commentators in this forum have skirted the issue, wanting answers, showing deep understanding, and they will love the film I am sure. I am applying the advice now, and feel a lot better about it, and already, I can see it having it’s promised effects – the banks have changed slightly, and are more tractable. Please, if you liked the film, and feel the advice is good, share the title and your feelings to your friends. But watch the film first, of course.

I am not able to keep pace with the remarks made in this debate. However, Brian (like me) a bank officer from the past keeps making the correct suggestions. Banks need staff who are qualified to deal with banking and its customers. I get fed up with presenting a query to bank staff on a promise they will get back to me. Often they do not and as the person who took the query has not made a note of it and has somehow disappeared into the ether; you need to start again. Continuity of staff at your local bank is what is required. I cannot telephone my local branch directly now. I have to call a call centre; identify myself in order to ask for a call, that often is not returned.

I must say that from some remarks logged, people do not understand banking but just want to make remarks about bankers bonuses and the basically criminal behaviour of investment bankers. This is ok but it is not enabling this debate to tell the bank in the high street what we need.

Michael Dawes says:
12 November 2012

We need the modern equivalent of the Glass-Steagall Act in the USA. High street banks should be forbidden to undertake any activities other than banking: no selling of insurance or mortgages, just bankng. All the risky casino stuff must be confined to merchant (investment) banks so that if they fail only their shareholders suffer and the rest of us can leave them to their fate. That way, we might in time come to trust our banks again.

Adrian McTiernan says:
23 November 2012

Michael – you have said it my friend. Very clearly a man of sense – the Casino angle is so very true – Playing roulette with our money – disgusting – I feel like the Bank of England should have branches everywhere, and be made accountable to Parliament for wise use of the monies of this fair realm, etc. But will that happen? – possibly, if we push Government to do what we want, not what the bankers and investment/stock exchange want.

David says:
24 January 2013

Michael has hit the nail on the head. However, a big mistake in the past was to allow the Building Societies to become banks. They originally performed a valuable service to the public – they paid interest on deposits and lent the money (at a higher rate of course) to qualified applicants who wished to buy a house. What was wrong with that ?
However, they got greedy, and wanted to “play” with our money – the result is apparent to us all.

Brian says:
12 November 2012

Stan seems to be one of the few agreeing with me; probably because he is an ex-banker like me. All these proposed solutions suggesting American remedies are not relevant. They are [may be not all of them] relevant to the demise of banking in the UK as we knew it.

Brian says:
12 November 2012

Michael quotes the Glass-Steagall Act in USA which I have not read. He describes its intentions as being similar to the remedies I have suggested earlier. This may be one of those [rare] good suggestions from the country that gave us a lot of our present day banking problems.

Andrew Lewis says:
12 November 2012

Recent comments on the dear old Glass-Steagall Act of 1933, sadly repealed in 1999, bring back many memories. From 2000, until I retired in 2007, I gave many presentations and training sessions on behalf of my company about investments and economics, mainly to investment professionals. I regularly banged on about the folly of repealing this Act. The removal of the division between investment and retail banking was a harbinger of disaster and although the UK had no such Act it was obvious that where America led we would follow. After all banking is very much an international business, so we would have no choice. But, hey, it was also encouraged by the Government.
Bizarrely I have a builder who has done various work for me over the years who took a keen interest in all matters financial. So we had some interesting conversations. Last time he came over he told me that he had been hearing more about the Glass-Steagall Act and it rang a bell with him as he remembered me talking about it. If it registered with him, and with no disrespect to builders, perhaps it registered with some in my audiences who might go on to be in positions in the future where they have some influence in the better management of these affairs in the future.

I agree with the former bankers, their industry has been brought into disrepute in the name of profit
Whether this was because of the repeal of an act I am not qualified to say
I have put my views in an earlier post
But changing things will not be easy,or even possible, as the monster has become so big and important to the economy that Governments are afraid of the financial industry,after all think of the revenue it generates.
The Forex market,which is only one part of the market for example is worth 3 Trillion pounds a day,yes that’s 3 Trillion per day,how much revenue does that generate?
How much of the money being gambled in that market belongs to the customer?
I’ve said before it should only be shareholder money that is used to gamble,remove the customers/business money from the pot and whats left to gamble with?
Do you think the Government really wants to interfere with that golden egg?
The only place in the UK that matters is London and the square mile.

Robbed says:
22 November 2012

It seems to me thhat the which campaign is more about cosying uop to common misconceptions than any joined up plan for improvement.
My problems are that banks like so many others are more interested in providing expensive “extra’s” than the basics.
In particular there is to my personal experience a failure to integrate internet and high street banking. Lloyds TSB is telling me it is necessary to go to a branch to close 2 a/cs my branch is turning me away telling me they cannot do that with internet a/cs.
Banks are seeking market share and turnover (good for employment but not the customer) rather than attempting to retain existing customers.
PPI has degenerated into a fiasco pumping billions of taxpayers and savers money into the maw of the legal profession who are aggressively seeking another honeypot.

Just be aware that it was the government that set up this commission.

The government are on the bankers side. That is the main thing that needs to change. It seems impossible. They’re all friends.

Legislation is the only thing we have to combat corrupt bankers but who’s responsible for that? Who hasn’t done anything about them for the past 3 parliaments at least?

My MP has also said that it’s unlikely anything will be done until an appropriate judgement comes from the Supreme Court!

Problem with that is that it’s not easy to get there if you’re not friendly with a banker!

I’m giving it a go though. 14 years so far…

Brian says:
29 November 2012

Why does saltydog1 not place his real name as author?

It’s clear why he hides behind this name as he generalises about all bankers.

Generalising is always a dangerous [sometimes libellous] strategy.

This campaign can do nothing to change the the misery and suffering that the BANKS have caused, it will thankfully GOD willing help generations to come to have trust in these organisations

Panda says:
7 December 2012

Why don’t we trust banks – for the very simple reason that the executives award themselves enormous (actually – obscene) bonuses for “stealing” from their small share-holders! We’ve held shares for many years and seen no dividends at all. Why don’t we change – for why – are there any others operating differently?!!!

Jennifer Kaur says:
7 December 2012

I work for the Halifax and the Bullying and threats to your job are worse than ever, if you do not hit sales targets.
We are subjected to daily “mid-day” calls to explain ourselves if sales have not been achieved – as a staff member, you are going to sell at all costs to get yourself off the radar.

Given the economy, nobody wants to lose their job – so I am afraid some individuals will sell at all costs.

I have been disappointed recently by Nationwide which I have always held in high esteem. My wife and I wanted to find a higher interest rate for a joint savings account. We were directed to speak to an adviser who took three visits to get to know us and our attitude to risk plus plans for the future. As pensioners we donot want longterm investments and do not want to take risks. We already have a number of expensive holidays planned. We were eventually told that we could have been given application forms at the counter from day one but the counter staff are under instructions to divert customers to advisers in the first instance.
I am now investing more in premium bonds.

John West says:
7 December 2012

AS I banked with Barclays I went to them for two endowment mortgages to pay-off a mortgage of £40K. When the endowments matured the shortfall was in the order of £17k. Barclays claim (despite our certain knowledge to the contrary) that we had chosen a high-risk policy and it was not their fault. No end of letters to Barclays has made them change. I have moved my account to the Co Op Bank…

Julie says:
8 December 2012

Admirable campaign, but it doesn’t go anywhere near far enough in my opinion.
I want to see an end to the bonus/inflatedsalary/pension/pay-off culture too.