And what we need, I suggest, is a Basic British Bank, the BBB, to keep private banks honest as well. And that BBB would, of course, be owned by the UK state.
What would it do? It would offer basic, current and savings accounts to everyone, in the way that those old enough to remember it will recall that the Girobank once did, and it operated through the post office.
There would be no extortionate overdraft rates.
There would be fair interest on savings, entirely in line with bank base rate, or maybe a per cent or so less, but nothing like the penal and very low rates offered to small savers now.
And this Basic British Bank would have local branches, either of its own or in partnership with post offices and councils, and hubs of that sort are now becoming more common and are really important.
That’s not really the point being made here. This is:
We could open the doors to what should be a public payment infrastructure, which is a measure of resilience. I talked about this in 2008, when I thought that the biggest threat arising from the financial crisis, at least in its very early stages, was that there was a chance that the payment mechanism which ensured that British households could pay their supermarkets for food might fail. And that risk still exists at this moment, and it could present us with a crisis again, because if people can’t buy their food because there’s no payment mechanism to let them do so, then they will riot.
The fact is that payment infrastructure is not in public hands. We’ve learned nothing from 2008, yet. 17 years later, we still do not have a state-owned payment system within this country. And this British Basic Bank, Basic British Bank, whichever way around you wish to put it, the BBB could build that mechanism on which all other banks could be built, so that we would have a payment infrastructure in this country which would work whatever happened to our banks, because the state would own it.
Of course, we do have a public payments system. CHPS. Which is owned and run by the Bank of England. And of course a publicly run payments system handling the next level down, the £5 for a pint level, would never, ever, be used as a form of social credit. Ho no.
But, you know. Spud’s mentioned this before, that the State should create the banking system, everyone else just gets to be a brand that runs on top of that. Because this would be better, much better.
As shown the last time the stat tried to build a real time retail payments system of course. ICL built Horizon for the Post Office…..
About Girobank from from wiki: “The transaction (privatisation) was completed in 1990 and by this time the bank was essentially indistinguishable from its competitors, apart from its use of post offices to transact cash business”.
So, the last time the government tried to operate a bank it ended up being the same as all the other banks, almost as if the best way to run a bank is to run it the same way other banks run banks…..
In a parallel universe, Johran Madmani is going to open state grocery stores in NYC. Commies – Johran, Murphy – think that no experience is needed to run banks, stores, etc. It’s Dunning–Kruger effect: they don’t know enough about banks and stores to even know they don’t know how to do it. They walk in the door, and it looks simple.
Would anyone, say Nigel Farage, be able to obtain banking facilities?
Personally I wouldn’t take the risk.
Lots of people wouldn’t be able to obtain banking facilities, because they’d be delivered by the state and therefore that delivery would be shit.
99% of the payments that he’s mithering about can be handled using the safest payment system of all – Cash. Failing that, the fantastically-effective cheque. Both systems that TGATG are trying every possible means to get rid of.
llater,
llamas
If the banks we have now find it expensive and inconvenient to maintain branches for retail banking, and those branches where they do survive have no autonomy at all to provide customer service as banks used to do there’s obviously a reason why it’s maybe not a good idea.
“There would be fair interest on savings, entirely in line with bank base rate”
And where would the money come from to pay this interest? Presumably from the profits from commercial loans, just like all the other banks. So no different then, the BBB would be subject to exactly the same commercial restrictions as any private bank.
And what happens when the BBB has more deposits than it can profitably lend out? After all paying base rate on savings would be very popular, especially in a bank backed by the State, so would attract a lot of deposits. Where are the profits going to come from to pay base rate on all of these?
MOAR TAX, of course.
This BBB, being state-run, will require armies of bureaucrats on vastly over-inflated salaries and gold-plated pensions. Along with the requisite EDI enforcers and political commissars. Those don’t come cheap either. So it would likely end up costing the depositors far more in the extra tax they have to pay than the interest they receive.
Remember pay day loans? Everyone claiming they were ripping off the customers (including Spud) and it could be done cheaper. IIRC the CofE or similar organisation had a go but even without the overheads they couldn’t make it work and in the meantime the pay day loan companies were regulated out of existence and loans sharks are no doubt having a field day.
With the left, and Spud in particular, its always the magic 3 step process:
The window dressing changes but the underlying idea of getting his grubby hands on other people’s money is a constant.
“What would it do? It would offer basic, current and savings accounts to everyone, in the way that those old enough to remember it will recall that the Girobank once did, and it operated through the post office.
There would be no extortionate overdraft rates.”
Yes, but the thig with those “basic” accounts is that they didn’t offer overdrafts at all.
“There would be fair interest on savings, entirely in line with bank base rate, or maybe a per cent or so less, but nothing like the penal and very low rates offered to small savers now.”
There is a competitive market. Not as competitive as it should be, but if someone could make it add up, they would.
“And this Basic British Bank would have local branches, either of its own or in partnership with post offices and councils, and hubs of that sort are now becoming more common and are really important.”
Oh FFS. This is pure “and a rainbow unicorn too” stuff. I used to know this stuff, working in a building society and I forget the exact numbers, but someone in the late 90s told me that internet transactions cost 10p, ATMs were 50p and branch transactions were £1.50. And that was early days of internet. I’ll bet that is less than 10p now.
You can’t have nice fat interest rates, and a smiling lady called Doreen in a branch to talk to. Doreen wants to get paid. And most of this “hub” shit just moves the cost. Instead of you getting a worse rate of interest, or even paying fees, the council pays it and you pay the council.
Of course, if he really wants, what he says he wants, he should be agitating for the expansion of cooperative credit unions on the US model – not-for-profit, member-owned and controlled. Loans at affordable rates, no-fee basic banking services, competitive interest rates on deposits, moderate fees. Plus – if I don’t like something my credit union is doing, I can go to the member’s meeting and raise a stink, or I can buttonhole one of the directors that I know personally and give him a hard time. Something that the BBB – like the Post Office before it – would make absolutely-impossible to do. Horizon, anybody?
llater,
llamas
I’m assuming you’re American. We have things called building societies in the UK. Owned and controlled by members, not for profit. There’s Nationwide, Coventry, Yorkshire, Skipton and some others. Roughly speaking, the money deposited by savers is leant to borrowers.
If you have a mortgage or a £100 bank account, you get a vote. You can go to the AGM and complain etc etc.
I am in the US but lived in UK for many years. I’m well-familiar with building societies.
There are many similarities with credit unions, but I think there are also major differences. BS’s have always focussed primarily on home mortgages – large, long term loans. By contrast, CU’s concentrate much more on smaller, shorter-term loans – car loans, boat loans ASF.
Another major difference is scale. Since even the 70s, when I lived in UK, many BS’s were busy merging and conglomerating to become nationwide brands (NPI), and I understand that many have deregulated from being building societies to become (effectively) retail banks, with shareholders instead of members. By contrast, US-style CU’s are almost-aggressively local – every one-stoplight town seems to have its local CU – or affinity-based to eg an employer or a school system. This granular, localized structure makes it a lot easier to maintain the types of member control and not-for-profit orientation that keeps them member-focussed. When a member can get up at the members’ meeting and ream out the board face-to-face over some allegedly-poor decision, and the board has to face its members at work the next day, it tends to keep the organization focussed on its vore goals.
Not all CUs are like this, and recent deregulations have not improved matters, but it seems to me that the concept is a lot closer to what Ritchie says he’s aiming for than a nationwide state-run bank or even a building society.
llater,
llamas
Yep, we have local credit unions in the UK. I used one about eight years ago to get a car loan so I could get to work so I could pay the loan.
Base rate is currently 4%. So at “maybe a per cent or so less”, the Bank of Murphy would be paying 2.5% to 3%.
From a quick squint at Money Saving Expert, Cahoot (who I think are now owned by one of the High Street banks) are offering 4.4% (5% on up to £3,000, and I suspect Murphy won’t want us to have more than that anyway).
So the “very low rates” offered by the current banks are up to twice as high as Murphy wants to offer.
And that took seconds to check.
How arrogant and stupid does Murphy have to be to post something when, with a few seconds work, he could have seen that it is obviously nonsense?
My hypothesis is that any claim he advances can be demolished with a single web search. Thanks for the confirmation of another one.
He doesn’t check because he knows he’s probably wrong. That doesn’t matter though. Some people lap up his bullshit so he gets a Quantum of Approbation.. He doesn’t realise that that quantum is similar in magnitude to Planck’s Constant.
I told you – 100 percent of his problems comes from not knowing what anything he says means.
He needs to get out more. For most people under 25 the idea that a bank was a physical building you visited to make transactions would be bizarre. Why would their banking app on their phone only work in the those buildings?
Brits rioting? You must be joking.
Murphy is probably thinking of the NewBrits.
They love a good riot.
The state bank will get one of the Met Office’s supercomputers so they can continuously monitor transactions. No financial secrets.
“Why did you buy that brand of soap instead of this one?”
A state bank will be the ultimate totalitarian weapon.
“if people can’t buy their food because there’s no payment mechanism to let them do so, then they will riot.”
There’s a phrase doing the rounds on the USian right:
“they don’t want to kill you because you’re a Nazi. They call you a Nazi so they can kill you”
These morons will screw up the payments system _in order to provoke_ a riot.
Private banks already do all this and there are no ‘extortionate overdraft fees’.
Also, those old banks didn’t use to offer interest on accounts did they.
Finally, what would a government be doing that would put a fire under the already very competitive private banks? His description is just ‘bank, but the government runs it as well as it runs everything else’.
>There would be fair interest on savings
Banks do not need deposits to make loans – so why would this bank pay interest on deposits? Since it is solely being used as a place for safe deposit and ease of entry into the electronic finance system why would a bank not *charge* fees for this service?
For myself, I have a small line of credit with my credit union – if I need an overdraft it automatically adds it to my LOC and up to that limit I do not have to worry.
Why does it need local branches?
I go to my CU like maybe 3 times a year. When I financed my house I applied online, talked to the CU agent by phone from a different state, uploaded documents to their online portal.
Bro thinks it’s still 1985 and his solutions are always for a world 40 years behind reality.
‘Bro thinks it’s still 1985 and his solutions are always for a world 40 years behind reality.’
That does sound like me!!!!!
C’mon, man, you sound like my son:
“Dad, why are you still writing checks?”
Higher intetest on deposits, lower charges, lower interedt on borrowing, high customer service standards. i.e. cost,cost,cost,cost.
it would haemorrhage money.