麻豆社

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Clearly the obvious questions roll around:
a) How does a bank make 'profit' - it has no 'product', sells no obvious item.
b) Given that it makes nothing that is consumed surely all its 'profit' is actually just a measure of how it is ripping off its customers.
c) How can a bank justify the MASSIVE gulf between the base rate/ savings rate and the rate it charges business to borrow and at the same time defend such enormous profits.
d) It appears obviously true that if you charge massive interest rates (as the banks do) in a cartel (they are basically all the same rate so there is obviously agreement and no competition) making enormous amounts of money (not profit, just accumulated rip off) when the country needs investment and growth are you not just shafting the very people that saved your jobs?

Maybe we should give up on attacking the banks for making profits and concentrate on the rip off being perpetrated on Joe Public by the power and fuel companies. It seems that attacking the banks is a more attractive proposition to the media than doing something worthwhile and giving these charlatans a roasting.

Jeremy Hillman.

"..we are naturally very keen to put questions, on behalf of our audiences, to those running our banks."

I'd like to know why the banking sector employees need massive bonus payments to encourage them to their job to the best of their ability. could it be that bonus has become a euphemism for bribe?? (bribes for colluding in amoral and unethical activities?)

Inflation explained?
Inflation is TAX - It's built into the money supply and is deliberate calculated and controled. It is not somthing that just happens. The entire economy is a ponzi scheme and inflation just part of the con.

Lots of railling against the banks generally will appear at this location in the not too distant future. Have a couple of points to make, though.

anotherfakename - whilst they do no produce anything, they do provide a valuable service. That of enabling us to keep our money and not have to do so under the matress. As well as the other benefits of providing loans, mortgages and other financial products that we cannot function without (insurance, for example). Granted, their rates are so closely matched that they could be thought to be operating a cartel, but surely that can't be so as they would have been had up by the regulators? I do agree, though, that the differential between the Bank of England Base Rate and those being charged by the banks for loans is something of an outrage.

We've started this blog with the Barclays results. Let us please remember that Barclays played the markets wisely (in staying away from the toxic American loans and property generally in the build up to the crash) and have shown a significant profit without the aid of a bail-out from the Public Purse.

When RBS/Lloyds/Northern Rock et al post their results and bonus pots, I shall be screaming in outrage with the rest of you, though...

Remind me what legislation has been put in place to stop the need for a state bail out again?

It doesn't matter where in the world you go, the system is much the same. The banks make as much money as they can using our savings and the interest earned though the internation money market and other schemes like high interest rates for borrowing, mortgages, and fees. Some may argue that it's any company's job is to produce a profit, pay dividends and invest wisely in both their own resources such as staff an stock holders and to act responsibly and morally when dealing with joe public. It seems to me that it doesn't matter whether barklays accepted bailout money from the public purse or not, nothing justifies the hugh bonuses or wages to the people at the top and the increase in wages of offset lower bonuses this year, or so we are led to believe, is immoral when the rest of the country is suffering as we are. Let's not go down the old route of new governments blaming previous governments for 'the mess we inherited', let's remember the global economic meltdown started with the banks and the lack of control governments were using to stop companies such as the banks, and in particular the banks, from acting irresponsibly and immorally amoungst themselves. It's very true about that saying 'greed breeds misdeeds' and I think in the light of the current economic climate, the government needs to take action now as promised to curtail irrisponsible and immoral practices by the banking institutions. Do their promises really mean nothing other than a greed (sorry about spelling)

I do wonder why as a nation we continually berate successful businesses like Barclays who by luck or good management have been successful. If you don't agree with their business ethics there is a simple solution - close your account and move to a Bank that is more aligned to your own ethics and beliefs. Like it or not we have all benefited directly and indirectly during the past 20 years and now we are all caught up in the financial and social cost of sorting things out. I don't like much of what is being proposed though I do understand the drivers and my biggest worry is that the experts (government bodies, Bank of England, FSA etc..) who allowed this to occur are the same people we now rely upon to get things back on track. The past 20 years or so has witnessed a business dialogue for 'increased performance and performance related everything' with little or no consideration for the impact that consequential failure might bring. Stop bashing the banks and the financial industry in general as they are necessary and have had more job losses in the past 20 years than any other industry - you just don't hear about it.

Given what we have now heard about Barclays the whole banking sector need to be overhauled.

Hang on a minute.
What year were these results for? Which party was in power then? Which party does this gobby MP belong to? Why was she so quiet that year? Why did Peston never question Labours regulation regime? Why did Peston dismiss any idea that the Government had over-borrowed?
And whilst we on about dishonesty. The gross figure given is for global profits but the tax is for UK profits. What is the UK profit and what percentage of profit was paid in tax by Barclays?
The 麻豆社 and half a story, as usual.

Barclays hasn't just decided to pay less tax. They have applied tax rules to do so. We need to see a breakdown of where profit was earned and what taxes were paid elsewhere. We also need to know what allowances were used, like the losses they made in 2008 that can be offset against profits in 2009.

The picture y.ou have given is incomplete and therefore biased.

... and another thing ;)
If the 麻豆社 really is unbiased where are the investigations into the organised agitprop against companies on 'unpaid' tax?
How much tax did the unions pay in 2009? What about the SWP and Labour parties? Have they 'avoided' tax at all?
And the SWPs activists. How many paid the 'incorrect' amount of tax? How many work full time for the party and claim benefits at the same time?
And Labour's rich backers, what about them?
And what about the 麻豆社? How many presenteres were paid directly through PAYE and how many were paid through 'service' companies designed to 'avoid' tax? IR35 was introduced by Labour (at the request of their big IT backers) to destroy, er sorry compensate for, small IT consultancies taking advantage of tax laws to enable them to grow into multi-employee businesses. Funnily enough the regulations omitted similar arrangements in the media and for MPs. Funny that. Where's the investigation into that?
Balance is in your genes? You must be mutants then.

5. At 7:49pm on 15 Feb 2011, kaybraes wrote:

Maybe we should give up on attacking the banks for making profits and concentrate on the rip off being perpetrated on Joe Public by the power and fuel companies.
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Can't we multitask...be a shame to let Barclays latest stunt pass unnoticed...

15# Diversionary tactics eh? Won't wash - nobody goes after the tiddlers..

13. At 8:42pm on 19 Feb 2011, DeathnTaxis wrote:

Hang on a minute.
What year were these results for? Which party was in power then? Which party does this gobby MP belong to? Why was she so quiet that year? Why did Peston never question Labours regulation regime? Why did Peston dismiss any idea that the Government had over-borrowed?
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Perhaps it had something to do with the fact that the folk (including all those oh so clever economists and Dave "I'll match Labour spending 拢 for 拢" Cameron)didn't appreciate the extent of the dubious irresponsible practices tha naughty bankers had engaged in.....so they wouldn't have anticipated that massive drop in tax revenues that resulted. But you're right in one sense,Labour should have reversed Thatcher's deregulation policies and they didn't.

We are participating in bank bashing again and I have huge amounts of sympathy BUT I notice today that Halifax have announced that it is paying its customers 拢500M in compensation.
I think there is a very important comparison here in that the Halifax is in dire straights yet is paying the compensation in full. Compare this with the Equitable Life saga. Here, although the Ombudsman said very forcefully that there was a large amount of blame at the regulators door both Labour and to a lesser extent the Conservatives have said that the compensation for Equitable Life will be diminished due to the government's ability to pay. Admittedly we seem to have got rid of the pernicious means testing of the claimant proposal that Labour put forward but we still have the means testing of the compensator element.
Here at least the banks are playing by the rules and paying up in full where as the government who according to the Ombudsman had a large part in the Equitable Life crisis are weasling out of their responsibilities.

@anotherfakename (#2) - I'm all for reducing the exorbitant bank charges and culling the ridiculous particularly given their role in the financial crisis, but I think your argument is flawed in its very first premise. Just because banks don't necessarily have tangible products doesn't mean they don't have products.

There is clearly risk involved in many transactions that a bank undertakes so it's rather over-simplistic to state that all it's profit is a measure of how much they rip off customers. They do assume risk and deserve reward for that. The public gripe is rather that they deem the reward to be unfair - and rightly so - given that various governments have bailed the banks out (thereby taking away the risk they were meant to be rewarded for) It is the public that now assumes that risk given that state funds were used for the bailout. In that light it is absolutely wrong that the banks should claim profit and government should certainly tax them appropriately to allow the public funds they supplied to be replenished.

Anna ()

Well said Anna (#20)... I would add to "public funds they supplied to be replenished" ... with interest!

Oli

Without playing Bash-the-Banker, i'm certainly interested to know why the BoE base rate is 0.5% yet my mortage is fixed for 2 years at 2.79% then going up to 4.49%.

I understand completely that banking a business and ofcurse they are going to charge a certain amount on top of this, but still, 4% is a beyond the pale. It certainly smacks of fleecing the little man, and has been pointed out before just about every bank/BS is is at about the same, and that is cartel politics. It does certain make a convincing case for breaking the banks up into their constituent parts and promoting true competition again.

@8. At 12:06pm on 16 Feb 2011, cymrufach wrote:
...
anotherfakename - whilst they do no produce anything, they do provide a valuable service. That of enabling us to keep our money and not have to do so under the matress.

Whats so valuable about that? No really... It does save the good old royal mint printing quite so many bank notes, but in general the service is of little real value. Some might suggest there is security in it - but look at the money we the tax payer had to expend to ensure that safety. The banks don't 'store' our money they gamble it.



As well as the other benefits of providing loans, mortgages and other financial products that we cannot function without (insurance, for example).

You don't need banks for loans or mortgages. These aren't services provided for free and again I come back to the point - they create enormous 'profit' from this which is created by charging an ursurous interest rate to lend you money they've paid nothing for (see above about storing money). The loans/mortages are provided at excessive interest rates which means that many businesses (like mine) look at opportunities to expand, look at the cost of the capital, look at the BofE threats to increase that even further, look at the economic prospects and decide to sit tight and hope we aren't bankrupt soon. The bank 'profits' have a very negative effect on this country.

And we can function perfectly happily without insurance. Indeed if we cut the 'compulsory' insurances for cars etc we would probably all be a good deal better off. Car insurance is nothing short of a ripoff. If you weren't insured and stood to lose your lifes savings and house if you had an accident you would be more careful, if you weren't insured or covered by 'no win no fee' ambulance chasers you would think twice about launching spurious and expensive claims the rest of us pay for through our insurance.

As the 麻豆社 has been at the forefront of banker bashing I am not surprised that Barclays did not want to enter your kangaroo court.

When you say 鈥榦n behalf of our audiences鈥� please count me out. You do not represent me.

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What I'm finding very strange is the lack of reporting from western media on the rumour that 50,000 Mercenaries in Libya, have been provided by an Israeli company called Global CTS. No mention by the 麻豆社 or the British Press on this disturbing piece of news. Why? Regardless of whether it is true or false, it is still something which deserves being reported on. These are serious allegations and need to be investigated. Especially if this company has the approval of the Israel government, which has been claimed, and reported on by the Egyptian press and on Press T.V, amongst others.

Mr. Hillman, have you found that your site has allowed you guys to get your reports points across? Is it tough to report news from an area going through rough times?

In response to a few of the comments that have been posted here, I鈥檇 like to add some reciprocating comments which I hope will enlighten some people and perhaps just put up another point of view.

Bankers Pay 鈥� Bankers, like everyone else on the planet, work hard and expect to be rewarded for their efforts and endeavours. This is the same with any other hard working man or woman. What a person determines to be an acceptable level of reward is largely dependant on qualifications, experience, proven deliverable results, but also what the market values their skills at 鈥� which means it鈥檚 a supply and demand game. Banking is a borderless operation, in that Bankers are relatively mobile and can work most places, but that is also true of the banking operations. Within the banking environment there are only a few who are truly gifted at what they do and they generate large profits based on they amassed knowledge and experience. Other banks would love to have them work for them and would offer crazy money to recruit, so crazy money needs to be offered to retain. The majority of other bankers are probably on decent wages and get a performance bonus which is not too dissimilar to those found outside of banking.

Banking Profits 鈥� High street, retail banking is very low margin business for the banks. For most people who keep a current account in credit, and use the banks network, their ATMs , their internet services etc etc, then banking to them is free. The banks will try to make a margin on the cash that they hold on your behalf, but the margin would not be sufficient to cover the cost of running the branch operations and maintaining the networks. The profits are made in retail banking by lending to people (loans, mortgages and credit cards) who are unable to save to buy the stuff they want to consume. Again this is supply and demand 鈥� if demand is high then the price goes up, in much the same way as airline tickets. However, there is a significant cost of running this book of business as there is generally little security provided to the lending bank (except for mortgages), and so the bank carries much of the default risk. The vast majority of banking profits are made through the investment banking and wealth management activities. A typical example of this is where a companies Board decides they would like to take over a rival and would like to borrow the money to complete the transaction. They would also like someone to help them get the company for the lowest possible price. No single bank would lend them all the money (too risky), so the investment bankers would work behind the scenes trying to secure the funds from the lowest cost, but most secure, sources. They would also work with the Board to try to determine and negotiate the best price for the company they want to buy. The bank gets paid through a success fee (if the deal concludes) and commission on the loan they facilitated. Without these services there would be very little merger and acquisition activity.

Base Rate vs Lending Rates 鈥� If only the world was that simple and you could borrow money directly from the Government or Bank of England at the base rate. However, the rate at which loans and mortgages is set is a complex structure driven by the banks cost of capital. Again it comes down to supply and demand. In the current market, supply has been strangulated (we鈥檝e all over-borrowed and there is insufficient liquidity in the market) which means that the rate banks have to pay for the money they borrow goes up. On top of that, Governments have introduced new liquidity rules, which mean the banks have to sit on far more cash than they used to (2 鈥� 4 x the amount of cash/capital). From the banks perspective this is effectively dead money 鈥� there is nothing they can do with it, yet there is a cost associated with holding it (whether that be the cost of dividends that need to be paid to shareholders or the cost of interest owed to other institutions which lent the money to the bank). The impact of this is that it increases the cost of capital to the bank. The Regulators do not allow the banks to lend money at a cost lower than their cost of capital (anti-competitive and a sure way to put deposits at risk), and so the banks are obliged to ensure that loans are provided to consumers at a rate higher than their cost of capital. The reason why all the banks offer much the same rate is that their cost of capital is all about the same as they鈥檙e getting their money from the same sources. The margins are very tight. The best way to get the cost of borrowing down, is to lower demand (stop borrowing) and increase deposits at the banks (start saving) which is what we鈥檙e all being told, but none of us really want to do.

Instead of the Media picking on the banks why don't they post the real problem with the country.

Our MP's waste our tax money.
Last week the gov boasted we will stop overseas aid to 16 countries.
In the next breath they stated they will up the aid from 7.4 billion to 10 billion why we at home suffer higher taxes, bad roads, council cuts, housing shortages, job losses, paying for immigrants to be kept here.

Besides 7.4 billion being an outright lie, this is closer to 拢800billion, the MP's continue to rob us and brain wash the brit opublic into believing we should give our tax money away.

So shut up and pick on the subjects the majority of the brit public want you to pick on, but oh no you can't do this, as it is against the law.

Get out of the EU, PC and HR rubbish and look after Britain.

These are the subjects the media should push not the banks.

To whoever may be interested, to all it concerns,

I'd like a rough figure on how much tax revenue the UK government, the American government etc lose out on due to offshore tax havens.

This is an issue I feel needs a global approach as one government cannot act alone as the companies and individuals involved will simply move their companies out of the country that tries to address the issue. It is a problem I feel which will only get worse if not addressed and the revenue that is lost is needed in order for the tax burden to be reduced on those that do not use offshore tax havens.

The individuals and companies that take advantage of these offshore tax havens do all benefit from the protection, security and infrastructure provided by large tax revenues paid by those who do not.

Business is an ever increasingly international affair and the taxation policies must change in order to keep up with this if humanity is to make progress.

Kind Regards

Sam Pye

We have a huge business project which has secured a massive amount of grant funding.

Water company came onto our land 3 years ago and caused massive disruption in which our business was interuppted. We have tried to secure the match funding and have done so but with a lender who is taking our eyeballs out complete with sockets etc. and as yet still hasnt confirmed if they can help us. Due to the water company works on the land we have sufferred great losses both in our business and our home life.

We have secured the grant funding as a way in which to try to get the business back on track. Water company are constantly trying to avoid paying us rightful compensation and there is no mechanism in the law to force either a timeline or indeed any other method to agree compensation except for the lands tribunal - a costly and lengthy process with no guaranteed results.

The banks are unwilling to help any small business without an impeccable credit rating and a good track record in business. As our business suffered huge losses due to the business interuption we do not fit any normal banking criteria and are forced down the route of back street lenders if we are indeed to survive. Water company have taken the approach that they can afford to wait .... hoping that we disappear into the abyss of yet another small business graveyard. Therefore their claim is extinct. I have met up with Landowners all over the country who are suffering in exactly the same way. Water company are entering property under permitted rights and are not paying the rightful compensation and anything that they deem "as too remote for compensation" is then written off regardless of the nett effect on the business.

The return of grant funding will mean that we will not be able to create the 20 jobs we had hoped and the flagship centre of excellence for our region. Yet water company sit quiet while all this goes on. Their Chairman has been chairman and executive of many failed financial institutions and here he is again at the helm of a water company too!

Who will help me bring this to the attention of the public and the government as this cannot be allowed to keep happening to landowners through out this country.

Please help me tell this story and maybe even through this we can find the match funding we require to get this project underway. I have to make this known at the very earliest in order to rescue the funding and the business whilst we continue our battle for rightful compensation from the water company. All of which our barristers and solicitors, land agents and forensic accountants say is rightfully ours.

If the 麻豆社 close down Local Radio Stations how are people to find out information about the area they live ?
Maybe they they need a train or bus to take them to work, if the news is not there about were they live it will make them late.
What about people that can not get out a about? we do not want to hear news a about Manchester or London if you live in Mersey side, it means nothing to us if their buses do not run.
Lily

The opportunity to ask questions is here -- my question is -- where do we find the answers ?

At 7:03pm on 11 Mar 2011, Lady Justice:

I thought everyone knew the path that the banks and government follows on business.

Unless you don't require a loan you won't get one from the banks.
Unless you are of a certain persuasion you will not get government assistance.

I know 3 couples, my daughter being one of them, who are in the process of losing their house. Unfortunately they have no young children are of white ethnic background, are British born and bred, and unemployed, so they have no chance of a government or bank assistance, Both have recently lost their jobs through no fault of their own.

Instead of assisting them to stay viable the government gives a total of 拢800 billion away in supporting overseas lost causes and to hell with the British.
However I do blame the voters as the recent by election shows. The public are disillusioned with the coalition so what do they do? Vote for the party who made this mess in the first place.
When the brit voters see sense and dump the Lib,Lab and Cons for the smaller parties we may have improvement. Surely anything is better than the mess we are in now.
The UKIP, BNP or Islamic parties cannot do any worse can they ?

As the UK bank reporting season gets underway with Barclays today we are naturally very keen to put questions, on behalf of our audiences, to those running our banks. Those questions would of course reflect a number of major issues firmly in the public eye.

From when banks first started to appear, which Strange as it may seem, UK banking can trace its origins back to the days of the Roman conquest. 鈥淢odern鈥� UK banks evolved following the Crown鈥檚 dissolution of the monasteries through King Henry VIII who were at that time the more traditional keepers of money in the 1530s.
That said, it was not really until approximately 400 years ago, during the mid-1600s, that London really started to cement its position as a financial hub of importance when goldsmith bankers started to emerge, following King Charles I seizure of gold deposited in the Tower of London and the English Civil War, as a safe-haven (away from the clutching arms of the Crown!) for the gentry and aristocracy to deposit their money and valuables.

Up to the early 1980's Banks were looked upon as king pins of the society, even then they made large (but not grotesque) profits from investing capital on behalf of savers, pension funds, investors amongst others. However, there is a very big difference between then and now,

After the Conservatives were defeated in 1974, Thatcher challenged Heath for the leadership of the party and, to the surprise of many, won. In the 1979 general election, the Conservatives came to power and Thatcher became prime minister.
An advocate of privatisation of state-owned industries and utilities, reform of the trade unions, the lowering of taxes and reduced social expenditure across the board, Thatcher's policies succeeded in reducing inflation, but unemployment dramatically increased.
Along with her policies the 'Greed of the Banks and newly Privatised Utility companies' quickly became endemic.

We are now very sadly in the position of Banks making Grotesque Profits, a lot of this profit has come from the foreclosure of small buisnesses who, whilst not in the red, where struggling to survive was not far down the road, however the banks, one in particular that seems to excell at this, called in loans, seized the companies, selling the companies assetts at a not inconsiderable profit. I know personaly of two companies where this has happened.

The same is now happening on a very worrying escalating scale with homes where the owners are clearly trying desperately to keep their heads above water through no fault of their own.
The homes, and in some cases the contents of those homes are siezed and sold on at a considerable profit.
The same is now also happening to individuals, Personal insolvantsies and bankruptsies are now the highest they have ever been.

Just how has this all happened, first of all look at the massive interest rates charged to small businesses and indiviuals by banks, compared to the rest of Europe.
The clearly grotesque profits the banks were making prior to the crash, and the still grotesque salaries and bonuses being paid out - even after the British Tax Payer has effectively bailed them out - to people who are 'doing their job', so why the grotesque bonuses?

Unfortunately it doesn't stop there, the Utilties are seemingly able to charge what they like - 'The Greed factor' - yet again, tried finding out just how much the electricity, gas and water suppliers actually pay for the commodities they then sell to Joe Public at an and clearly enormous and grotesque profit. Even if you are lucky enough to get an answer, it will be worded into totally meaningless gobbledegook.
Again, the telephone number salaries and bonuses for what is effectively 'Ripping off the Public', with very poor services to boot.

Public Transport is another area, over four times the subsidy that was paid to British Rail in real terms is now paid to Network Rail, most of that seems again to go in telephone number salaries and a yearly bonuse of 拢2.35m to senior executives, what is this bonus paid for? certainly not maintenance and safety that is for certain as not one person has yet been held to account for Gospel Oak, Hatfield, Potters Bar and Carlisle train crashes - yet all were down to poor maintenance - Greed at the top.

Was it not Thatcher who said that wages had to be earnt, and bonuses paid on results? I don't call robbing the public at every twist and turn earning a bonus or a salary increase, but maybe that is what she meant!

The unfortunate realaity of, and since the advent of Thatcherism, has been Greed, Greed, Greed.
Quite clearly the privatisation of the Utilities, British Rail, the deregulation of the Banking Industry has escalated into an seemingly unstoppable Gravy Train of Greed.
As we all learnt even Parliament was in on the act with expenses being claimed for duckhouses and other professionaly unrelated claims as well as their second homes that in one case didn't even exist!

Am I angry? Damn right I am! I want to see answers to this question of Grotesque profits and Greed and I want to see action, not just a meaningless tirrade of words and excuses.

The problem with Greed is that it blinds all to everything except the Greed itself.

Asking questions of senior personnel in banks that the Labour government unwisely bailed out, and therefore set a precedent that is unlikely to be extinguished, is legitimate and entirely reasonable. It is a great pity that the decision to do so was left in the hands of Ministers with no business experience, else the taxpaying public would have seen conditions attached to any lending.

Asking questions of senior personnel in Barclays, which has not taken one penny of public money, is neither legitimate nor reasonable. Barclays is owned by shareholders, all of whom have access to the remuneration policy and statement prior to AGM voting. If the majority of shareholders approve the bonuses at Barclays, then that's all there is to it.

Why are you asking, you know only too well what the questions should be. Both to the Banks and our politicians.

What we need is a 麻豆社 with the backbone to ask the questions until we get an answer.

I wont hold my breath

Ask banker's questions? That's like asking a bull what he does with his horns? & I forever hear the government & the bankers say, that if the top management & investors were not paid those massive bonuses they'd go elsewhere. Well, I've got new for them...it was on their watch (those who would "Take up their bed & walk (sorry drive)elsewhere that got us into the mess in the first place. The two questions to ask them is, when will they hold up their hands & take responsibility for the most part of the mess they created? & secondly, what charity are they going to give their bonuses to, apart from their own bank account, that is?

I can think of at least one dozen charities who are in Japan locally at the present time who would be very happy to get their hands on the bankers obscene bonuses...for a greater need. Or other causes as great as, but don't hedge your bets.