Banks are too expensive!
05
May
How often have you wondered why banks make soooo much money? I certainly have.
Record profits every year.
“HSBC has unveiled the biggest profits ever by a UK High Street bank, making a pre-tax profit of £11.5bn($20.97bn) in 2005, aided by growth in new markets.” “Two federally-controlled banks, the Caixa Econômica Federal (basically a savings and mortgage institution) and the Banco do Brasil, have announced record operational profits in 2005.” “National Bank sets record year-end profit”. and so on.
What this says to me is that a), someone is charging a shitload in fees, b) the small guy is losing out, c) why haven’t I founded my own bank and d) is there an alternative?
Well there seems to be an alternative. Although I don’t want to promote a company here as yet, there are apparently some banks starting up now where the money you borrow isn’t directly from a bank, rather from other…people! Interesting concept. Mediaeval maybe, but interesting.
It’s bascially a swap market for money - people lend it and people borrow it. It’s abit like buying on ebay, someone is willing to lend you money for a certain interest rate (which is lower than that of the major banks), and you have to “bid” for it to get that amount of money at that lending rate. It seems great.
However, what also fascinates me is one companies concept behind it all - making “borrowing and lending money fun” and supporting a good cause.
I guess the question is how safe is it, which it seems to be to an extent.
Really however, your money is never “really safe” though is it?
1. BillyGoatEric | May 5th, 2006 at 11:52
I like the idea…and it seems they have a blog that is worth reading.
2. Oz | May 5th, 2006 at 19:38
An article on banks… how exciting. Then there’s an alternative to banks… interested. Then came the Zopa message boards. Proof of why you should check out the links that people post.
It all sounds great as an idea but in practice? Isn’t that why banks offer term deposits? Giving you some reward for investing money with them so they, in turn, can make a profit lending your money to someone else at a higher rate with the security knowing the bank can cover it.
This money ’swap market’ just doesn’t sound as secure to me…
3. CutieGoat | May 9th, 2006 at 17:16
With the idea of the bank using your money to lend onto other people is not just way of making the liquidity flow privately all over the world, to me, it will create a can of worm for people to get all your personal banking details on the internet, and open up an opportunity for the hackers to intruding your bank accounts easier, and quicker, where the bank can then take no responsible for it. It’s scary! Don’t you agree?
Personally, I get this sort invitation from almost every bank eg. the which bank, the HK bank, the Eurobank, etc.. .for this sort of job by offering my time, e-mail address, and free time to deliver money to the protential customers around the country daily. Should there be some sort of regulation that the ACCC needs to investigate? What about the monetary policy on lending nand borrowing that the Reserve bank support to play it’s role?
I don’t think this is a good idea as per BillyGoatEric said. It rather a legal way of Con.