Wednesday, May 25, 2005

Whose money is it anyway?

Banks exist to make money. That’s OK but they don’t do anything unless there’s money in it for them. And they don’t like anything – certainly nothing as crude as competition - coming between them and their money making. And because there are so few of them and because they’re so big, so powerful, so well-connected, it’s virtually impossible for anyone, whether democratically elected governments, individual customers, customer groups, Brussels, the UN, you name it, to hold them to account. As J K Galbraith (almost) put it, the thought that, in some undefined way, we must not hurt the economic system is still one of the most prominent means by which we allow banks to ever tighten their stranglehold on us.

Clearing banks each make around £30m each year simply from doing nothing – merely delaying payments made by their customers. That’s only pocket change for these guys of course but they levy charges on top of that so it’s a bit healthier although still chickenfeed.

Now though, for the second time in twenty years, their archaic payments clearing money maker is under threat and they reckon they will need to keep it running for at least a further three years before they can get the clearance time down to – wait for it - two days, a time frame that will naturally incur far higher customer charges by way of compensation. The POSIWID of paying your gas bills is to make easy money for fat cat bankers.

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