As an ex banker, I know how deluded investment bankers are.
I was so deluded I thought trading stuff that only a few people understood and ripping off the useless and the useless meant I was entitled to be paid handsomely for the effort. Of course this was before governments sponsored banks and inadvertently made the situation worse. Delusion about being too big to fail and all that.
Regulators and technocrats have bust the banking model. Banks don't want your money as it's too risky (where did it come from? Will you be wanting leverage? Are you a money launderer?) and prefer grabbing cheap money from governments. As for lending money, well the best place is the ECB. Who wants the risk of lending to companies who might not service the debt. Or worse not pay it back?
However, I have some sympathy with the banks. It is not all their fault. The regulators have distorted the banking model. Banks have to police their own activities and tell regulators what they do (suspicious transactions to money laundering). Lots more costs and less innovation. Banks have to report trades, accounts, bonuses, stewardship controls, how many non execs have never fallen asleep at board meetings ...
But we are all tired of the excuses. The latest "string up a banker" is the fallout of the LIBOR collusion and learning most of the banking markets are rigged. Well this isn't true at all. Only the most illiquid are. And this is where I bash Markit again (fintag), the most illiquid bank self serving idea that was the primary reason we had the subprime mezzanine debacle and a good night out is at the local soup kitchen.
I tried to open a bank account last week. Don't bother. I tried 5 European banks and gave up. I wasn't willing to submit my urine. And then I tried an Indian bank and an African bank. Account was opened the same day. Whether I get to see my money again is my risk so why should I struggle to open an account at a fully regulated bank with a compensation scheme?
Dave is the way forward
Channel 4 - The Bank of Dave
Geezer goes begging (bloomberg)
Norway readies up to buy Spain (reuters)
Private banks are the new banks.