Banking

Arguably it was Robert Peston’s breathless reporting of trouble at Northern Rock on the evening of 13 September 2007 that kicked off the crisis. The next morning, depositors were queuing round the block and the drama that would almost bring down the global banking system a year later had begun. Looking back after a decade, we can be grateful for the bailout interventions that shored it all up at the moment of cataclysm — but we can also observe the lingering and deep unfairnesses of the longer-term recovery. Ultra-low interest rates that will not rise above inflation anytime soon mean blameless savers face continuing negative returns on cash deposits; yet

The Co-operative Bank, an ethical lender based in Manchester, has extraordinarily loyal customers. Why, you might wonder, is having loyal customers so extraordinary? Well, in the case of Co-op Bank, you could hardly blame them if they took their accounts elsewhere. The fact so many have stayed put, despite the bank’s spectacular fall from grace, might well have something to do with the paucity of other options on offer. There’s a screaming need for an ethical alternative to the bonus-hungry greed of the mainstream banks, who all too often treat their customers with contempt. Before it ran into the rocks, it seemed as though the Co-op Bank fitted the bill.

People who don’t bank online are more likely to face financial trouble than their more internet-savvy peers. That’s according to research by the University of Bristol for investment website Momentum UK which found that those who bank by phone are five times more likely than internet bankers to miss bill payments and nine times more likely to know how much money they have in their account. While just 3 per cent of people who use a computer to bank had been unable to pay a bill at the final reminder in the last year, for those using the telephone as their main way of  banking this figure rose to 15

Tesco chairman John Allan provoked feminist fury by telling would-be non-exec directors, ‘If you’re a white male, tough: you’re an endangered species’ — then claimed he was really trying to make the opposite point, that ‘it’s a great time for women’. But to the contrary, this was a week in which tough white males grabbed the corporate prizes, while one high-flying woman from an oppressed minority was hounded out of her job. First, the blokes. HSBC announced, for the first time in its history and to the satisfaction of governance zealots, the appointment of an outside chairman. Incumbent Douglas Flint is to be succeeded by Mark Tucker, a former professional

I was sorry Kraft Heinz’s £115 billion bid for Unilever collapsed so fast — unveiled on Friday, it was dead by Sunday. Not that I saw the aggressor as a worthy potential victor; but a longer battle would have provided great material for column-sermons on good and bad capitalism. Aha, I hear you ask, but which side is which? Unilever is the Anglo-Dutch maker of Dove soap and Magnum ice creams. With its dual headquarters in London and Rotterdam, its multi-layered bureaucracy and its bosses who bang on about social responsibility, it might be seen as a big fat corporate proxy for the European Union — in urgent need of

Many thanks to the stampede of readers who sent news of bank branch closures. There’s certainly a national pattern, and possibly an epidemic, with HSBC, NatWest, Clydesdale and Yorkshire Bank closing outlets as fast as they can, and only the Nationwide building society making a virtue of offering an undiminished service. Counter staff still in post are praised for their kindness, particularly to readers’ elderly mothers, but sham ‘consultations’ on closures that are faits accomplis are a frequent cause of irritation. It’s clear that many towns will soon be left with no more than a single ATM plus, if they’re lucky, a post-office counter — making life particularly tough for

President Donald Trump is demolishing his predecessor’s legacy as fast as he can sign executive orders, but one thing for which the Obama administration will be remembered is its zest for imposing fines on UK and European banks. In a flurry of Department of Justice activity ahead of the transfer of power, Deutsche Bank agreed to pay $7.2 billion and Credit Suisse $5.3 billion for misleading investors in mortgage-backed securities before 2008, while Deutsche also copped a $630 million penalty (from UK as well as US regulators) for alleged money-laundering on behalf of Russian clients. Meanwhile, Royal Bank of Scotland set aside another $3.8 billion, making a total provision of

Can we do without cash? Since 2015, digital payments in the UK have outnumbered those in cash, and we are invited by the great and the good to cheer this on. The fully cashless era will be magnificently convenient, they say, with goods delivered directly to the door: no fumbling for change, just tap and go. Some London branches of several chains (Waitrose, Tossed, Doddle) don’t accept cash any more. Many others fast-track customers who can pay by contactless means. Businesses and banks want to abolish cash because they have near-pathological fears of the black market and tax avoidance. Yet we should worry about the death of cash, because physical

From ‘English versus German banking’, The Spectator, 18 November 1916: At the present moment a good many of us are in the mood to feel that we never wish to see any kind of German within our country again; but it is quite certain that this attitude of mind will not endure for ever, and it is equally certain that if we prevent German bankers from establishing themselves in London after the war they will take their business elsewhere, and to that extent London will lose its character as an international banking centre. Mr Pownall well expresses the main proposition: ‘It is the universality of London, its cosmopolitan composition, that creates

There’s an electronic device on my desk that looks — through its bubble- wrap — like a cheap miniature calculator. It’s still in the packaging a month after it arrived because I’m irritated by the idea that I have to master a new gadget specifically designed to complicate a familiar action. The thing is a debit-card reader, and I gather I must activate it whenever I want to send money from my bank account via the internet to a new payee. At first that was done simply by typing the payee’s details into boxes on my laptop screen; then it involved waiting for a security code to pop up on

The new series of The Missing is surely the gloomiest television of the year. But it has nothing on the endless saga of RBS, which seems to use the same disturbing time-shift device: whenever there’s a horrible new plot twist, you have to spot whether we’re in 2008, 2011 or today. The crippled bank, still 73 per cent state-owned, has lost £2.5 billion in the first three quarters of this year, having just paid out another £425 million in ‘litigation and conduct’ costs chiefly relating to mortgage-backed securities hanky-panky in the US. Since its bailout eight years ago, it has lost considerably more than the £46 billion of taxpayers’ money

As the 30th anniversary of Big Bang loomed, I found myself back at the scene of my City demise. Ebbgate House — headquarters of BZW, the investment banking arm of Barclays where I worked until one fateful morning in 1992 — fell deservedly to the wrecking ball a decade ago. It was replaced by Riverbank House, and there I was last week, hovering above where my desk used to be, talking about ‘why no one listens to the City any more’ and reliving the P45 moment that released me into the happier world of journalism. Personal echoes apart, this was also a moment to revisit Big Bang, the Thatcherite reforms

What should we think about negative interest rates? What kind of Alice in Wonderland world are we living in when companies and households are paid to borrow and charged if they save? Seemingly crazy, negative interest rates are spreading nonetheless. Implemented by central banks in Europe, Japan and elsewhere, they now apply in countries accounting for a quarter of the global economy. Should we be worried? Could we see negative rates in Britain? Earlier this month, the Bank of England cut interest rates for the first time in seven years, from 0.5 per cent to a new record low of 0.25 per cent. Quantitative easing was also restarted, with the