Douglas Carswell's Blog

Changing banks for the better. It can be done

Sir David Walker, new chairman of Barclays, is interviewed in the Telegraph.  An interesting read for several reasons. 

First, Walker hints that banks might start charging customers for having accounts. This might actually be something we should welcome, not complain about.

Why? Perhaps one of the reasons we get such poor customer service from banks is the fact that we’re not always regarded by them as paying customers?

Banks, of course, still find ways of getting us to pay for things, even without upfront fees. Hence many of the mis-selling problems. Perhaps upfront fees, combined with Andrea Leadsom’s brilliant proposal for portable bank accounts, would do a lot to change things for the better?

No doubt some folk will grumble at the suggestion that we should pay banks to hold our money. Surely banks ought to be paying us interest for holding on to our money?

Except, of course, ever since the retail deposit guarantee scheme came in the first tens of thousands of pounds anyone pays into a UK bank account is guaranteed by the state. Rationally, with zero risk associated with loaning the money to the bank, the rate of interest is likely to be close to zero. As long as there is a retail deposit scheme, don’t expect banks to pay you much to hold on to your money (Another reason why we don't save enough?) 

Walker says that one of the things he is keen to change at Barclays is the compensation system – bonuses, in plain English. Glad to hear it.   

Here’s a simple idea to do make it happen;  banks like Barclays ought to pay their shareholders their dividends first. Then – and only then – pay out bonuses with what is left over. The way to sort out bank bonuses is to ensure that senior management at the banks works for those who own the banks, rather than keep helping themselves to the lion's share of the businesses revenue.

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