Creators and casualties of complexity: why banks are eurozone’s fault line [BBC]


The familiar expression that springs to mind is “what goes around comes around” or, in Biblical terms, perhaps befitting the scale of the problem…

“as you sow so shall ye reap”

However, please note the deliberate use of the term “casualties” rather than victims. Because, the ability to socialise the losses renders citizens as the VICTIMS!

Here’s the lethal chain of causality: banks have found it harder to borrow because of their big loans to the likes of the Italian, Spanish and Portuguese governments, and because of fears these governments will struggle to repay their debts; but if one or more of the banks were nationalised, the perceived liabilities of these governments would increase; and that in turn would erode confidence in the ability of other banks to repay what they owe; and so on, till no institution in the eurozone is seen to be sound. Read more of this post

CONFUSOPOLY or TRANSPARENCY?: UK banks charging as much as 800,000% on overdrafts


For me one of the most telling facts about the “Payday Loans” story is that the Financial Ombudsman receives very few complaints about them yet is swamped by unprecedented numbers of complaints about banking and the wider Financial Services sector!

Calls for regulation of interest rates are understandable and fully justified BUT, across the board. Great quote from Mike Dailly at Govan Law Centre:

“The Romans 2,500 years ago managed to cap lending charges at 8%” 

One thing that strikes me about this aspect of the market is that, at least, the Payday loan companies are TRANSPARENT about equivalent APR which cannot, necessarily, be said of the High Street Banks! Yet it is the banks who talk about customer “relationships” the other is, essentially, transactional. Confusing, isn’t it!? Read more of this post