Interest on savings could go negative!

Totally_Baffled · Post by **Totally_Baffled** » Sun Jan 04, 2009 4:15 pm

http://news.bbc.co.uk/1/hi/programmes/m ... 809530.stm

WolfattheDoor · Post by **WolfattheDoor** » Sun Jan 04, 2009 5:04 pm

If savers lost money by putting it in a bank, then they wouldn't bother and the banks would have no money to lend out to mortgages which is what everybody says we need.

Besides, my building society, the Nationwide, has already said it is not going to reduce some mortgage rates to protect savers' rates.

JohnB · Post by **JohnB** » Sun Jan 04, 2009 5:21 pm

So the banks that have f****d up the system will expect the only responsible customers they have to help pay for their incompetence. That's clever. Under the mattress in my van doesn't seem like a very safe alternative though

revdode · Post by **revdode** » Sun Jan 04, 2009 6:48 pm

I'm almost tempted to bring my savings across here. We still have decent savings rates but at 275 forints to the pound I'd lose a lot on transfer without charges. I'm also reasonably convinced that despite having a manufacturing base the economy in Hungary is more likely than that of the UK to fall apart.

skeptik · Post by **skeptik** » Sun Jan 04, 2009 7:27 pm

WolfattheDoor wrote:If savers lost money by putting it in a bank, then they wouldn't bother and the banks would have no money to lend out to mortgages which is what everybody says we need.

Precisely. That's why it wont happen. Banks need depositors. All negative savings rates would do is provoke a run and a massive increase in the sales of safes and piggy banks.

I'd rather bury my money in the back garden than PAY a bank for the privilege of looking after it for me. Worked for Samuel Pepys. (Even if his dad did make a balls up of noting the burial location properly, resulting in the loss of a few coins)

JohnB · Post by **JohnB** » Sun Jan 04, 2009 7:53 pm

It's interesting how the system works. If you want to borrow money from a bank you have to fill in forms, give proof of identity and have a squeeky clean record. But if the banks want to borrow your money you still have to fill in forms, give proof of identity and have a squeeky clean record!

We should be able to go to banks and building societies and negotiate a price and terms that suit us for them to have use of our money, especially in these difficult times. That's how a free market should work. Just like Tesco with the farmers. Oh I see now

skeptik · Post by **skeptik** » Sun Jan 04, 2009 8:15 pm

JohnB wrote: But if the banks want to borrow your money you still have to fill in forms, give proof of identity and have a squeeky clean record!

Probably because *most* banks don't want to be hauled up as receivers of stolen goods, as accessories to terrorism, or on money laundering charges.

...remember BCCI ?

DominicJ · Post by **DominicJ** » Sun Jan 04, 2009 8:22 pm

Interest rates on US short term Tbills are already negative and foreigners got negative interest rates from the swiss banks in the 70's.

skeptik · Post by **skeptik** » Sun Jan 04, 2009 8:44 pm

DominicJ wrote:Interest rates on US short term Tbills are already negative and foreigners got negative interest rates from the swiss banks in the 70's.

Not for long though! Not a long term option unless you want to see your money evaporate. That this happens at all shows that there's a huge fear factor currently in operation - that some people would rather buy zero rated T-Bills than park their money in a bank.

RevdTess · Post by **RevdTess** » Sun Jan 04, 2009 10:59 pm

JohnB wrote:
We should be able to go to banks and building societies and negotiate a price and terms that suit us for them to have use of our money, especially in these difficult times. That's how a free market should work.

You can. See www.zopa.com Okay it's lending to other people rather than to banks, but you can set your own interest rate and decide whether to lend to prime or subprime folks.

JohnB · Post by **JohnB** » Mon Jan 05, 2009 12:11 am

Tess wrote:You can. See www.zopa.com Okay it's lending to other people rather than to banks, but you can set your own interest rate and decide whether to lend to prime or subprime folks.

Interesting. Unfortunately I need the cash available in case I suddenly find my dream home, so I suppose I'm stuck with what I'm doing at the moment.

DominicJ · Post by **DominicJ** » Mon Jan 05, 2009 8:56 am

Unfortunately I need the cash available in case I suddenly find my dream home, so I suppose I'm stuck with what I'm doing at the moment.

Which is one of the problems banks have, I wouldnt borrow money that must be paid back at a moments notice, but then we expect banks to do that.

Not for long though! Not a long term option unless you want to see your money evaporate.

Not for me to deceide, I just dont hold cash, but during the 70's, people were prepared to pay a swiss bank to hold their money