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Friday, 5 August 2016


Since the creation of the EURO and then the creation of the European Central Bank (ECB), previous long revered,  basic banking principles seem to have been completely abandoned ! 

Originally Banks used to earn interest by lending money and also paid interest to their customers for loans received, or for surplus money in their current accounts.

People with Wealth but no Pension could in this way Retire and live on the interest from Banks.  This was often the case for Widows and for example, retired small tradesmen or shopkeepers.  Low interest rates have now killed this option ! 

Banks always charged for the services like cheques clearances of active accounts.

Since the introduction of the EURO everything has changed !   The ECB now determines the Interest Rate for Inter-Bank clearances, which is very low !  (This also determines the official interest rate).  The ECB also creates and provides all the liquidity which EU Banks  need to encourage an increase of business volume !

But suddenly, there are signs that Banks are no longer as profitable as they were before the EURO, which was introduced in 2001 !   Why ?  This is in spite of their rising Bank charges to customers for "managing" their bank accounts !  

There are also frequent reports that salaries and bonus payments to Directors in recent years have spiralled !  Are they really merited ?   Are their duties so much harder than before ?   If so, one must question whether, after the increase of computer technology, Banks have properly streamlined their operations and cut the number of employees to remain competitive ?    

One hears now that Banks are worried because  customers seem to be withdrawing spare credit from their accounts !  Is that not because they receive little or no interest from banks anyway ?

Banks fear that customers prefer to harbour liquid money (under their matresses) in case banks might block withdrawals !  Is that legally possible ?

So, is there really a hidden Banking Crisis which could be announced shortly, when all banks are closed for business ?