Is Now The Time To Ditch Your Bank?
Mervyn King is warning the UK’s big four banks to make sure they have enough capital in their balance sheets to provide for future losses on dodgy commercial loans. The story is here on the BBC.
They only talk about the big four banks; HSBC, Royal Bank of Scotland, Barclays and Lloyds.
So where are these banks going to get the money they need? Shareholders will probably tell them to get lost, as you don’t throw a lifebelt to a man, who’s obviously dead in the water. You get prepared to fish him out and take him to the mortuary.
They will get the money from the mugs in this equation; the customers. Charges will increase, interest on savings will drop and I believe that free banking will end in the next few years. It’ll probably not end before the next election, as then the hated bankers will give the election to the Labour Party.
So in my view, the best thing you could do is to see if you actually need your bank. Especially, if it’s one of the so called Big Four!
But where would you move your money?
How about a big foreign bank?
I know that Santander hasn’t been specifically named as in trouble, but with Spain on life support, you wouldn’t want to keep your money there. It after all breaks one of my late friend, David’s Golden Rules. Never bank with a bank that is head-quartered outside of the UK.
There’s always the Bank of Mattress. Sadly, I think many wll start to use this, when they are levied the inevitable bank charges.
But I suspect that my combination is one of the best. I use an old-fashioned building society for my working capital and paying bills, and keep the rest invested in various places such as safe investments and peer-to-peer lending.
The Anonymous Widower 