A range of related news hits the desk today, from the likelihood that banks will be offering interest-free mortgages, as interest rates hit zero, to the opposite end of the scale where savers will be paying their bank to look after their money in the future.
Savers paying to have their money held by a bank?
£50,000 ($75,000) of my deposits guaranteed for repayment within 7 days should a bank fail, regardless of how much I owe the bank?
Are we mad?
Is it getting to the stage that we might as well say:
"No matter what happens, we will ensure that you can gamble and borrow as much as you want for anything ... and then forget about paying it back. Oh yea, and for you guys who have some cash, give us your money and we promise we will give it you back if the bank screws up."
Is this really the way to go?
In particular, it will cause banks problems as savers put their cash elsewhere.
For example, the rich are sticking their money in gold bars.
With banks already cash-strapped, the last thing they want is all the guys with money, such as pensioners, putting their savings under the bed ... but what's the alternative?
© Private Eye, 2008.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...