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Bank bail in, anyone?

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Mike4
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Re: Bank bail in, anyone?

#523875

Postby Mike4 » August 19th, 2022, 11:08 pm

Lootman wrote:
absolutezero wrote:Received an interesting letter from Lloyds Bank. Updates to T&Cs.

The one that stood out sounds like we're being softened up for a bank bail in at some point. There could well be 'other' less sinister reasons for it, obviously.
We've added a new condition that says if it's necessary, due to economic conditions that affect the banking industry, we may restrict the amount you can have in your accounts either by applying a limit or by imposing a charge. If we have to do this and it applies to your account, we'll write to you with more information.

'Too much money in your account, sir? We'll take the difference. Thanks.'

Who said cash was safe?

I have a nasty habit of keeping about 20 grand in my current account. It is not unusual, when visiting a bank branch to do some business, that the teller will comment on the amount in there and tell me that I am at risk of fraud. The solution to that is that I should open a savings or term account, which I have no interest in doing.

When I ask why the money would not be safe in a current account, I never seem to get a satisfying answer. The whole point of a bank should be that your money is safe, no matter what type of account.

If what you cite becomes a trend (I am not with Lloyds) then perhaps I will be told to reduce the balance in my current account?


My own experience rhymes. My own bank rings me up from time to time to try to blag me into opening a 'savings account' for much the same reasons. I always make myself sound surprised and ask them if they are saying my money is not safe with them and would I be better of keeping in in a shoe box under my bed? They get all flustered and start prattling on about fraud and I say now you are really worrying me, you're a bank, right? What's the point of using a bank if my money is not safe with you?

I think they are minimum wage spods paid to to... erm.... I'm not actually sure what. But thing is, it all really worries me.

1nvest
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Re: Bank bail in, anyone?

#523893

Postby 1nvest » August 20th, 2022, 3:25 am

Have to smile. DEPOSITORY system, not custodial. Any money you deposit is then the banks money, free for it to do with what they like within regulation. In effect a loan by you to the bank. So they want to limit how much you can lend the bank, or require you to pay to lend above a certain level. Which seems odd given that they set the interest rate, in some cases 0%, which is suggestive they simply want you to pay to lend to them. Or I suspect is some wormy protection mechanism, where depositors will potentially be at greater risk at having to bail the bank out if its bets with your loan to them turn bad.

'Wise' as mentioned earlier is more of a custodial bank, where they use Gilts as the 'safe' and keep the interest for themselves.

The best custodial bank in the past 0% interest rate world was hard cash/currency locked away in your own safe keeping. Which if US$ hard currency has paid a 3.5% annualised yield since the start of 2008. £1 bought $2 back then, $2 recently buys £1.66. 66% gain in 14.5 years. Alongside physical gold coins also in your own safe since 2008 - that as at the end of 2021 had gained 8.6% annualised since 2008 !!!

A nice feature with US$ bills is that they never go out of circulation. Unlike Pound notes that 'expire' have to be submitted by a certain date when they are withdrawn, with US$ they don't do that, banks themselves simply swap them out as and when they're paid into the banking system. But it is a fiat currency, with a targeted 2% devaluation (inflation) rate, in contrast to gold legal tender being a commodity (non-fiat) currency.

US$ is the primary reserve currency, no longer bound to anything tangible such as gold, simply just a number, such that they can print/spend however much they can get away with, where each $ printed/spent devalues all other notes in circulation. Exports inflation onto others. Enables the US to print/buy a massive military might to maintain its dominance. And where all clearance traverses through the US so they can block at will US$ based transactions. Russia, India, China along with much of Asia with it (including to some extent Australia given its trading relations with 'neighbours' such as China), South America, Arabia, and Africa in the pipeline ... are all tending to drift away from the US$. Given the combined population counts of those countries - that's most of the world are tending towards not use the US$ and the fiat/depository based system it prefers.

It's not as though its just banks. Consider the states terms and conditions for Gilts. We reserve the right to print/spend money - induce inflation. We reserve the right to change interest rates and taxation rates, or other rules. Yes supposedly the BoE and Treasury are separate/independent, but largely in name only. As a indication of how independent - well the BoE printed money to buy up Gilts that the treasury had issued, and then repays all of the interest paid out on those Gilt - back to the treasury. As could it easily just tear up those Gilts rather than the treasury having to pay to redeem those Gilts. Pension funds are legally bound to buy Gilts, by law, as the T&C's as-is can have the state top-slice out of those pension funds through one means or another - raid pension funds.

Changes such as the OP's highlighted change - are all just small shifts towards seemingly collapse of the entire setup. As occurs with all fiat currencies sooner or later. Generational wealth tends to favour art/land/gold - tangible/real assets, for their ability to withstand the coming and goings of fiat/depository type eras. When they start clamping down on those - that's when generational wealth will be shifted to 'safer' regions and is the penultimate indicator of total failure in the fiat/depository system. If/when they outlaw gold for instance, that's probably a good time to buy gold in a location where its ownership isn't outlawed. But seemingly we're not quite yet into that phase.

GoSeigen
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Re: Bank bail in, anyone?

#523909

Postby GoSeigen » August 20th, 2022, 7:35 am

Mike4 wrote:My own experience rhymes. My own bank rings me up

Chimes, surely not ryhmes? Missed a trick there... ;-)

from time to time to try to blag me into opening a 'savings account' for much the same reasons. I always make myself sound surprised and ask them if they are saying my money is not safe with them and would I be better of keeping in in a shoe box under my bed? They get all flustered and start prattling on about fraud and I say now you are really worrying me, you're a bank, right? What's the point of using a bank if my money is not safe with you?


Very much agree about the messaging but actually I don't think there's much to worry about with banks at the moment. They are very profitable and paranoia of the OP is not justified. Their problem for the time being is too much cash/capital so they are competing with each other to reduce levels of capital and customer deposits.

That makes it a great time to be a UK bank shareholder BTW.


GS

stevensfo
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Re: Bank bail in, anyone?

#523924

Postby stevensfo » August 20th, 2022, 8:22 am

In addition, it's no big deal to simply open accounts with the new online challenger banks and spread funds around. e.g. Starling, Monzo, Atom, Metro, Revolut, EMIs such as Wise, Monese etc. I think there are plenty more but many of those based outside the UK have stopped taking new UK customers.

Steve

absolutezero
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Re: Bank bail in, anyone?

#523977

Postby absolutezero » August 20th, 2022, 12:06 pm

1nvest wrote:Have to smile. DEPOSITORY system, not custodial. Any money you deposit is then the banks money, free for it to do with what they like within regulation. In effect a loan by you to the bank. So they want to limit how much you can lend the bank, or require you to pay to lend above a certain level. Which seems odd given that they set the interest rate, in some cases 0%, which is suggestive they simply want you to pay to lend to them. Or I suspect is some wormy protection mechanism, where depositors will potentially be at greater risk at having to bail the bank out if its bets with your loan to them turn bad.

Always worth remembering that it's not your money in the bank.
It's just a liability on their balance sheet. You are nothing more than a creditor of the bank.

GoSeigen
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Re: Bank bail in, anyone?

#524030

Postby GoSeigen » August 20th, 2022, 4:46 pm

absolutezero wrote:
1nvest wrote:Have to smile. DEPOSITORY system, not custodial. Any money you deposit is then the banks money, free for it to do with what they like within regulation. In effect a loan by you to the bank. So they want to limit how much you can lend the bank, or require you to pay to lend above a certain level. Which seems odd given that they set the interest rate, in some cases 0%, which is suggestive they simply want you to pay to lend to them. Or I suspect is some wormy protection mechanism, where depositors will potentially be at greater risk at having to bail the bank out if its bets with your loan to them turn bad.

Always worth remembering that it's not your money in the bank.
It's just a liability on their balance sheet. You are nothing more than a creditor of the bank.


This is balderdash. Just because creditors and bank deposits are both on the liabilities side of a bank balance sheet does not make them equivalent. It's like saying because you keep your car and your hose pipe in the garage that your car is actually just a piece of pipe. Utter nonsense.

GS

rhys
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Re: Bank bail in, anyone?

#524191

Postby rhys » August 21st, 2022, 8:29 pm

ust because creditors and bank deposits are both on the liabilities side of a bank balance sheet does not make them equivalent. It's like saying because you keep your car and your hose pipe in the garage that your car is actually just a piece of pipe. Utter nonsense.


Try saying that to Lebanese families who can no longer withdraw their life savings. Their money still exists on the screen, but they can no longer withdraw more than 10% of it. The term Lollars for 'Lebanese US$' has emerged.

GoSeigen
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Re: Bank bail in, anyone?

#524235

Postby GoSeigen » August 22nd, 2022, 7:26 am

rhys wrote:
ust because creditors and bank deposits are both on the liabilities side of a bank balance sheet does not make them equivalent. It's like saying because you keep your car and your hose pipe in the garage that your car is actually just a piece of pipe. Utter nonsense.


Try saying that to Lebanese families who can no longer withdraw their life savings. Their money still exists on the screen, but they can no longer withdraw more than 10% of it. The term Lollars for 'Lebanese US$' has emerged.


You've just admitted that they are not the same. Depositors are permitted to withdraw 10%. In a crisis. [In normal circumstances they are permitted access to 100% of their deposits on demand].

Contrast with other creditors of the bank (e.g. subordinated debt holders, shareholders) who are not permitted ANY access to their funds whatsoever. They have to wait until their debt becomes due. Do you deny that this is the case? So how can it be argued that depositors are no different to other creditors. It's a cheap argument devoid of truth.

GS

paulnumbers
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Re: Bank bail in, anyone?

#524284

Postby paulnumbers » August 22nd, 2022, 10:29 am

Lootman wrote:
I have a nasty habit of keeping about 20 grand in my current account.


For those who can't be bothered the endless chase for savings account, you might consider these new marketplace savings account, where with a few clicks on an app, you can switch your savings to whatever their latest best offer is.

https://www.raisin.co.uk/savings-accounts/

UncleEbenezer
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Re: Bank bail in, anyone?

#524735

Postby UncleEbenezer » August 23rd, 2022, 5:39 pm

stevensfo wrote:Then followed by the full implanted chip in the brain. Resistance is futile! 8-)

Steve

Which chip would Sir like?


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