The Mean Banks

Banks are squeezing customers wherever they can. Mortgage rates are not coming down with the base rate; banking is getting more expensive; and lending rules are getting tighter.

Who’s to blame for all this? Why, the banks themselves, of course.

Who pays the price? The customer.

Banks want more security so they’re pushing the price of any service they can find up, while at the same time offering their services to fewer people – those they consider less risky. If you’re not a potential customer with a good track record, then you can go elsewhere. If you are, you can pay more!

A survey of corporate clients by banking group KBC shows that many companies have experiences tougher conditions, mentioning restricted lending criteria, tougher covenants, risks, tighter security.

The credit crunch, caused by the banks’ foolish investments, is moving on apace and will further constrain economic activity. The innocent are being punished by the guilty and the economy will suffer.

Not everyone in corporate world is yet seeing the effects, but the results of the survey are a clear sign that they will – later, if not sooner. The banks hold all the aces and can basically do what they like, charge what they like, take on what customers they like, and reject them as they see fit. As they will all do the same, there will be no escape from their meanness. It is likely that the situation will drag on through the whole of 2008 and into 2009.

In the current climate, with the Bank of England in a cycle of reducing interest rates, it would be hoped that the economy would receive a boost. Unfortunately the banks are in the middle and evidence so far is that many of them just see the falling base rate as an opportunity to squeeze more money out for themselves