This week I came across an old story, which reminded me of all the information I have read about both the US and UK schemes designed to get the economy moving again:
Once upon a time a man appeared in a village and announced to the
villagers that he would buy monkeys for $10 each. The villagers, seeing
that there were many monkeys around, went out to the forest and started
catching them.
The man bought thousands at $10 and, as supply started to diminish, the
villagers stopped their effort. He next announced that he would now buy
monkeys at $20 each. This renewed the efforts of the villagers and they
started catching monkeys again.
Soon the supply diminished even further and people started going back to
their farms. The offer increased to $25 each and the supply of monkeys
became so scarce it was an effort to even find a monkey, let alone catch
it!
The man now announced that he would buy monkeys at $50 each. However, since he had to go to the city on some business, his assistant would buy on his behalf. In the absence of the man, the assistant told the
villagers: "Look at all these monkeys in the big cage that the man has
already collected. I will sell them to you at $35 and when the man
returns from the city, you can sell them to him for $50 each."
The villagers rounded up all their savings and bought all the monkeys
for 700 billion dollars. They never saw the man or his assistant again, only lots and lots of monkeys!!!!
Saturday, 28 February 2009
Thursday, 26 February 2009
172 Big Macs for every man, woman and child in the UK!
A strange title I’m sure you would agree, but reviewing the papers today on the RBS losses got me thinking about how much money £24 billion, which is their declared loss, actually is.
Most of us would struggle to comprehend a number so astronomically huge and in fact try and ask someone to write down 24 billion as a number and I bet most people would think about for a while. Here goes: 24,000,000,000. Lots of zeros aren’t there. How can it be possible that a bank with a market capitalisation (value of issued shares) of around £50 billion can lose half that value in one year? It would be like Saffron Building Society which has capital of £50 million, making a £24 million loss. Just incomprehensible; and don’t worry we are making healthy profits.
So I got to thinking what does such a big number mean to each of us in the UK. Well according to the 2007 census and an updated mid 2008 estimation, there are 60,943,912 men, women and children in the UK. So the loss equates to £393.80 for each of us, or put another way 79 trips to the cinema each or 984 pints of milk each.
My major concern is how much future taxes will have to go up to pay for all the bail out schemes that the government have put in place, I hope Brown and Darling know what they are doing!!!
Most of us would struggle to comprehend a number so astronomically huge and in fact try and ask someone to write down 24 billion as a number and I bet most people would think about for a while. Here goes: 24,000,000,000. Lots of zeros aren’t there. How can it be possible that a bank with a market capitalisation (value of issued shares) of around £50 billion can lose half that value in one year? It would be like Saffron Building Society which has capital of £50 million, making a £24 million loss. Just incomprehensible; and don’t worry we are making healthy profits.
So I got to thinking what does such a big number mean to each of us in the UK. Well according to the 2007 census and an updated mid 2008 estimation, there are 60,943,912 men, women and children in the UK. So the loss equates to £393.80 for each of us, or put another way 79 trips to the cinema each or 984 pints of milk each.
My major concern is how much future taxes will have to go up to pay for all the bail out schemes that the government have put in place, I hope Brown and Darling know what they are doing!!!
Wednesday, 25 February 2009
World goes mad for "Crazy John's" ISA
Yes and I do mean the world. The product has been out there for nearly 2 weeks now, but since the product got a mention on BBC2’s working lunch today and got emailed out to the database by Martin Lewis of moneysavingexpert.com as a best buy, our call centre and website have been under constant bombardment from savers keen to take advantage.
We had always planned a limited availability of the product, but these high profile appearances have kind of accelerated that. So much so that we have had to confirm that next Monday will be the last day for applications from outside our own geographic area.
But what about my “global” comment? Well we have a stats engine which gives us a very detailed set of information about our website and where it is being clicked from both in terms of the search engine and source, but also the country and I was amazed to see that today we had interest in the product from pretty much all corners of the globe, including Canada, the USA, Russia, China, Brazil and even Tanzania. Unfortunately only UK residents are eligible for an ISA account, so I hope not too many people will be disappointed.
The thing that amazes me is that whilst the product is very well priced, the interest at the end of one year is just under £140 if you pay the maximum £300 each month. If you used your full ISA allowance in one go in our 2 year fixed ISA the annual interest would be just under £120, but I guess 20 quid is 20 quid……
We had always planned a limited availability of the product, but these high profile appearances have kind of accelerated that. So much so that we have had to confirm that next Monday will be the last day for applications from outside our own geographic area.
But what about my “global” comment? Well we have a stats engine which gives us a very detailed set of information about our website and where it is being clicked from both in terms of the search engine and source, but also the country and I was amazed to see that today we had interest in the product from pretty much all corners of the globe, including Canada, the USA, Russia, China, Brazil and even Tanzania. Unfortunately only UK residents are eligible for an ISA account, so I hope not too many people will be disappointed.
The thing that amazes me is that whilst the product is very well priced, the interest at the end of one year is just under £140 if you pay the maximum £300 each month. If you used your full ISA allowance in one go in our 2 year fixed ISA the annual interest would be just under £120, but I guess 20 quid is 20 quid……
Tuesday, 24 February 2009
"Crazy John's" ISA
When my Sales & Marketing Director John Eastgate ran into my office and said he wanted to launch a regular saver ISA product, I was delighted. As a 160 year old savings institution; helping people to build up a lump sum for a future goal is what we are all about. However when he told me wanted to pay 7% interest, I nearly fell off my chair….. and that was when Bank Base Rate was at the dizzy heights of 1.5%, before the February cut.
We have always ensured that we have competitive ISA products, believing that any product where no tax is deductible from the interest should be encouraged, but 7%? Have you gone crazy, or words to that effect followed his request, but John explained to me how he wanted the product to work and that encouraging people to put a little bit away each month, particularly when motivations to save may not be as strong as they have been in past, was the right thing for a mutual building society to be doing.
So having done the maths and establishing that the real cost of providing such a product is nearer to 3.7% than 7%, I agreed to support him in his quest. His next hurdle would be the Finance Director, Jon Hall, who is great at managing the purse strings. Keen to hear how the conversation had gone, I emailed around asking if the executive team had yet seen Crazy John’s ISA and the name sort of stuck. Now most emails inside the society on this subject are headed up with some sort of reference to “Crazy John”. I don’t think he minds too much, but I bet he is looking forward to the end of ISA season.
The theory though was cemented for me a couple of days ago when a journalist from BBC online contacted me. His opening gambit – 7% ISA, have you gone crazy? Of course I adopted the role previously played by John, talking about the real cost to us and our desire to encourage people to keep on saving.
So in summary, we haven’t gone crazy here at Saffron Building Society, I don’t think anyway, and of course we do have other attractive ISA’s available for those with lump sums or transfers, but anyone in the market for a bit of motivation to squirrel away some money each month, couldn’t do much better than join the “Crazy John” gang for a while!
Thursday, 19 February 2009
Is it me or is it Saffron?
I have recently watched some interesting clips on the BBC news website about some of the reporting done in the lead up to and during the “credit crunch”. One particular clip was centred on Robert Peston the BBC’s Business Editor discussing with MP’s earlier this month, his reporting of the Northern Rock difficulties in 2007, that some have said lead to the collapse of the Bank.
For once I found myself actually siding with the journalist, as to be fair Robert did not suggest that Northern Rock customers queue up and withdraw their cash, he simply reported the fact that the Bank had had to seek emergency assistance from the Bank of England. The rumour machine and our own fear did the rest.
We are in danger of becoming a nation where no one will be prepared to express a view or say what they know for fear of recrimination. It is true there have been some high profile cases of celebrities saying or doing things that they probably wish they hadn’t. Jonathan Ross and Jeremy Clarkson spring to mind, to which I should add that I disagree with what they did/said. However I increasingly see examples of people checking themselves or holding back, in case they say something inappropriate.
Indeed at my own board meeting earlier today we had a debate about whether we should put a disclaimer on this blog, stating that the views and opinions are my own and not necessarily those of Saffron Building Society. We decided against it, in favour of good old fashioned common sense.
I do not think the media should be gagged, in fact I don’t think anyone should, we have a right after all to freedom of speech. However I do think they have a duty to show both sides of the coin, not just the bad news that invariably grabs the most attention or is the most sensationalist story.
If that is something that comes from the review of the media’s reporting of the economic problems, then great, we should be brave enough to take the rough with the smooth, but please a bit of smooth occasionally would be great….
For once I found myself actually siding with the journalist, as to be fair Robert did not suggest that Northern Rock customers queue up and withdraw their cash, he simply reported the fact that the Bank had had to seek emergency assistance from the Bank of England. The rumour machine and our own fear did the rest.
We are in danger of becoming a nation where no one will be prepared to express a view or say what they know for fear of recrimination. It is true there have been some high profile cases of celebrities saying or doing things that they probably wish they hadn’t. Jonathan Ross and Jeremy Clarkson spring to mind, to which I should add that I disagree with what they did/said. However I increasingly see examples of people checking themselves or holding back, in case they say something inappropriate.
Indeed at my own board meeting earlier today we had a debate about whether we should put a disclaimer on this blog, stating that the views and opinions are my own and not necessarily those of Saffron Building Society. We decided against it, in favour of good old fashioned common sense.
I do not think the media should be gagged, in fact I don’t think anyone should, we have a right after all to freedom of speech. However I do think they have a duty to show both sides of the coin, not just the bad news that invariably grabs the most attention or is the most sensationalist story.
If that is something that comes from the review of the media’s reporting of the economic problems, then great, we should be brave enough to take the rough with the smooth, but please a bit of smooth occasionally would be great….
Wednesday, 18 February 2009
One centre for people with epilepsy and special needs, an enormous corridor, nine building society staff and Billy!
What an amazing day I had yesterday. I along with a few staff from Saffron Building Society, dedicated some time to help the St. Elizabeth's Centre, a national centre providing positive living and learning for people with Epilepsy and special needs, with a rather orange problem.
The central corridor at the centre has for the past few years been a rather psychedelic shade of bright orange, certainly not the most soothing of colours. The society, as part of our community programme was only too pleased to help when the centre asked if we could step in. We spent the day painting coat after coat of magnolia over the orange to clean up and refresh the area, ready for the staff and students to add decorations and personal touches.
I had seen photographs of the offending corridor, but when I arrived first thing in the morning, I have to admit to wondering if we had bitten off more we could chew. The sheer size of the wall space to be masked, cut in and painted, was to say the least a bit daunting. But the Saffron team pulled out all the stops and got the job finished to a high standard, which St. Elizabeth’s were delighted with.
We did have a little extra help during the day from some of the students, although as you can see from the photo, Billy who is a resident at the centre seemed more interested in painting me than the walls.
My staff did a cracking job which left me with a sense of pride and accomplishment, exactly the sort of activity that a regional mutual should be getting involved with. My thanks to Christian, Michael, Sue, Melanie, Chris, Ian, Linda, Heather and Richard for such an amazing effort.
Once my painting duties were over, I quickly had to remember what I actually do for a living. I rushed back to our head office in Saffron Walden, changed out of my paint covered scruff’s and donned a suit and tie, for a meeting of our Audit Committee with our external auditors to finalise our 2008 report and accounts for sign off at a board meeting later this week. I have to admit to chuckling to myself, sat in such a formal meeting and realising that my hands were still covered in magnolia paint....
Monday, 16 February 2009
What price trust?
Over the weekend we had a number of people come into our branches with new deposits from the struggling Lloyds Banking Group. These new deposits were handed over with comments like “you guys are trusted” and “we know you, you are local”.
The bank shocked the City on Friday when it reported an unexpected £10 billion loss in HBOS, the lender it rescued last month after Government intervention, making it worth far less than thought when it was acquired.
Shares in Lloyds Banking Group fell 12 per cent this morning, after a 32 per cent plunge on Friday, as concerns mounted about them being forced to seek a fresh capital injection from the Government.
Politicians say the revelation will make it inevitable that the bank will be forced to seek a fresh capital injection from the state, or even be nationalised, leaving taxpayers facing billions of pounds of extra losses on their rescue of the banks.
This got me thinking about the capital model that banks use to support their business activities. All companies need capital; we need it to support the building society in terms of the mortgage lending we have done. The FSA require us to hold capital that would be used to pay for things such as credit losses in the event of bad mortgage debts. Banks are the same, but their capital is provided through their share value, whereas a building society actually has to have the physical cash.
Capital is really only needed to support organisations in bad times, but the trouble with a bank is that when times are bad their share price plummets and their effective capital is diminished.
I think we could see a few phoenixes emerge from these economic circumstances. They will be the new banks of the future. They will be different from the banks we know in lots of ways. Firstly they will be owned by their customers, rather than shareholders; they will have prudent limits imposed upon them to prevent them growing too fast; they will have to cut their cloth according to their size; they will have to already hold the cash they require to support future business aspirations; they will have to make a profit, but not too much at the expense of customer value and they will be run by boards accountable directly to their customers.
Sounds familiar, sound like a Building Society, which is probably why the Building Societies Association have just published data which confirms that Building Societies are on top for service, value and trust.
http://www.bsa.org.uk/mediacentre/press/service_value_and_trust.htm
The bank shocked the City on Friday when it reported an unexpected £10 billion loss in HBOS, the lender it rescued last month after Government intervention, making it worth far less than thought when it was acquired.
Shares in Lloyds Banking Group fell 12 per cent this morning, after a 32 per cent plunge on Friday, as concerns mounted about them being forced to seek a fresh capital injection from the Government.
Politicians say the revelation will make it inevitable that the bank will be forced to seek a fresh capital injection from the state, or even be nationalised, leaving taxpayers facing billions of pounds of extra losses on their rescue of the banks.
This got me thinking about the capital model that banks use to support their business activities. All companies need capital; we need it to support the building society in terms of the mortgage lending we have done. The FSA require us to hold capital that would be used to pay for things such as credit losses in the event of bad mortgage debts. Banks are the same, but their capital is provided through their share value, whereas a building society actually has to have the physical cash.
Capital is really only needed to support organisations in bad times, but the trouble with a bank is that when times are bad their share price plummets and their effective capital is diminished.
I think we could see a few phoenixes emerge from these economic circumstances. They will be the new banks of the future. They will be different from the banks we know in lots of ways. Firstly they will be owned by their customers, rather than shareholders; they will have prudent limits imposed upon them to prevent them growing too fast; they will have to cut their cloth according to their size; they will have to already hold the cash they require to support future business aspirations; they will have to make a profit, but not too much at the expense of customer value and they will be run by boards accountable directly to their customers.
Sounds familiar, sound like a Building Society, which is probably why the Building Societies Association have just published data which confirms that Building Societies are on top for service, value and trust.
http://www.bsa.org.uk/mediacentre/press/service_value_and_trust.htm
Thursday, 12 February 2009
If rate cuts aren't working then why make them?
Mervyn King the Governor of the Bank of England has admitted that rate cuts are not working to re-start the economy.
The theory is that lower borrowing rates will help businesses and individuals by freeing up cash that would otherwise be servicing interest on borrowings. Sounds sensible, but even if the average tracker mortgage borrower does feel a bit more flush there is not much evidence to suggest that this spare cash is finding its way into the UK's till.
People are worried about job security, they are worried about getting a mortgage, they are worried about their credit card companies and banks calling in their overdrafts and credit limits, upon which they have probably over relied in recent years. With all this in the back of one's mind, it is no surprise at all that we are not all running round the shops on spending sprees or planning our next exotic holiday or house move.
I really think that the government will have to resign themselves to the fact that this will take time. We the general public will have to regain the confidence that has been lost.
I don't think it is beneficial in the long term for people to get used to unrealistically low borrowing costs, and I also think savers are getting a pretty raw deal at the moment, so let’s not have such low rates if it doesn't have the desired effect. A fair deal for all would be a better place in my view and with base rate at say 3.5% that would probably be achieved.
So if rates are not going to get us out of recession, what is? Well I think it is positive attitudes and thinking, which is why I was drawn to the story today about Claire Robertson, the manager of a Dorset Woolworths which closed when the firm collapsed who is to re-open the shop she worked for under the new name Wellworths.
Good on ya Claire!!!!
The theory is that lower borrowing rates will help businesses and individuals by freeing up cash that would otherwise be servicing interest on borrowings. Sounds sensible, but even if the average tracker mortgage borrower does feel a bit more flush there is not much evidence to suggest that this spare cash is finding its way into the UK's till.
People are worried about job security, they are worried about getting a mortgage, they are worried about their credit card companies and banks calling in their overdrafts and credit limits, upon which they have probably over relied in recent years. With all this in the back of one's mind, it is no surprise at all that we are not all running round the shops on spending sprees or planning our next exotic holiday or house move.
I really think that the government will have to resign themselves to the fact that this will take time. We the general public will have to regain the confidence that has been lost.
I don't think it is beneficial in the long term for people to get used to unrealistically low borrowing costs, and I also think savers are getting a pretty raw deal at the moment, so let’s not have such low rates if it doesn't have the desired effect. A fair deal for all would be a better place in my view and with base rate at say 3.5% that would probably be achieved.
So if rates are not going to get us out of recession, what is? Well I think it is positive attitudes and thinking, which is why I was drawn to the story today about Claire Robertson, the manager of a Dorset Woolworths which closed when the firm collapsed who is to re-open the shop she worked for under the new name Wellworths.
Good on ya Claire!!!!
Friday, 6 February 2009
A world of blame...
My journey from Towcester in Northamptonshire to our head office in Saffron Walden took me four and quarter hours this morning. Whilst travelling past Milton Keynes on the A5 dual carriageway the road went from slushy to completely snow-covered in the space of about 10 minutes. The snow flakes were like tennis balls.
This additional travelling time afforded me some moments to reflect on all sorts of things, the first driven by someone on the radio blaming the authorities for all the travelling difficulties people had been faced with this week. Funny because I didn’t think the authorities controlled the weather.
So I got to thinking about all the blame that the media help us to seek to apportion:
• "House prices have fallen and the economy is ruined because of the banks", is one I’ve heard. I could argue that culpability lays in a number of areas, such as government, lenders, borrowers, supermarkets, manufacturers, house builders, town planners and global impact; but that’s probably one for another day.
• At my youngest son's school this week, someone fell over on ice in the car park and the school have to consider the risks of being sued for allowing this to happen.
• I heard another news story about the AA blaming councils for car accidents in the snow as they had not gritted the roads sufficiently - which makes me laugh as this morning I was overtaken on a snow-covered dual carriageway by a van that must have been doing 70 plus mph. If he has an accident in my view the only one to blame will be himself.
I think the media and experts should allow us to take responsibility for our own lives. If we buy a house there is no guarantee that it will go up in value. If we choose to drive in the snow we should take care to protect ourselves and other road users. If we do bump into an open drawer at work, we should not enlist the help of an “ambulance chasing” claims management company to see how much we can get out of our employer.
As a species we are genetically disposed to calculate and take risk. As cavemen every journey away from the cave was fraught with danger. More people are seeking ways to take risk than ever, otherwise bungee jumping would never have been invented.
So for me, I don’t blame the authorities for snow, they couldn’t change it; but that leaves me with a need to blame someone else for something else. So I will, the Bank of England’s Monetary Policy Committee for reducing base rates again yesterday, adding further pressure to savers reliant on interest for their income. I blame them because fiscal policy takes time to work, we have had more than enough reductions already that have not been allowed to take their course and…. they had a choice!
This additional travelling time afforded me some moments to reflect on all sorts of things, the first driven by someone on the radio blaming the authorities for all the travelling difficulties people had been faced with this week. Funny because I didn’t think the authorities controlled the weather.
So I got to thinking about all the blame that the media help us to seek to apportion:
• "House prices have fallen and the economy is ruined because of the banks", is one I’ve heard. I could argue that culpability lays in a number of areas, such as government, lenders, borrowers, supermarkets, manufacturers, house builders, town planners and global impact; but that’s probably one for another day.
• At my youngest son's school this week, someone fell over on ice in the car park and the school have to consider the risks of being sued for allowing this to happen.
• I heard another news story about the AA blaming councils for car accidents in the snow as they had not gritted the roads sufficiently - which makes me laugh as this morning I was overtaken on a snow-covered dual carriageway by a van that must have been doing 70 plus mph. If he has an accident in my view the only one to blame will be himself.
I think the media and experts should allow us to take responsibility for our own lives. If we buy a house there is no guarantee that it will go up in value. If we choose to drive in the snow we should take care to protect ourselves and other road users. If we do bump into an open drawer at work, we should not enlist the help of an “ambulance chasing” claims management company to see how much we can get out of our employer.
As a species we are genetically disposed to calculate and take risk. As cavemen every journey away from the cave was fraught with danger. More people are seeking ways to take risk than ever, otherwise bungee jumping would never have been invented.
So for me, I don’t blame the authorities for snow, they couldn’t change it; but that leaves me with a need to blame someone else for something else. So I will, the Bank of England’s Monetary Policy Committee for reducing base rates again yesterday, adding further pressure to savers reliant on interest for their income. I blame them because fiscal policy takes time to work, we have had more than enough reductions already that have not been allowed to take their course and…. they had a choice!
Wednesday, 4 February 2009
Building Societies and the bail out of the collapsed banks
I still think very few people are aware that following the failure of Bradford and Bingley and the Icelandic Banks that it is the remaining UK deposit takers that fund the bail out, not the government as so many of the press have reported.
For example when B&B transferred its savings book to Abbey Santander, the retail funds required for the £18 billion worth of balances held by customers were simply not there. So a call was made on the Financial Services Compensation Scheme (FSCS) for all the balances covered up to the £35,000 limit as it was at the time. This was estimated to be £14 billion. The remaining (uncovered) £4 billion was funded by the treasury and therefore ultimately the tax payer.
The FSCS is funded by levies from the UK deposit takers, so we all have to pay. The irony is that the failed institutions relied heavily on wholesale funding markets which ultimately, significantly contributed to their demise, but the Building Society sector is heavily retail funded. Saffron Building Society in fact holds more retails savings balances than it lends in mortgages. Due to this the sector is now having to bear a greater percentage cost of the levy than the banks. This seems an unreasonable penalty for prudent policies.
Whilst for us the amount involved will not reduce our annual profits below acceptable levels, it will cost us in excess of £1 million from 2008 profits, with further amounts payable in future years.
Therefore I have today written to all of our local MP’s asking them to support an early day motion read recently by Ann Cryer MP.
Motion 426, Financial Services Compensation Scheme Levy on Building Societies, raises some very important concerns of both Saffron Building Society and the entire building society sector. I have provided a copy of the text of the reading below.
I don’t want this to sound like sour grapes, but building societies typically run more traditional and less complex business models than banks. We are naturally risk averse and prudent in looking after our member’s money and because of this our levies are disproportionately high……
I would love to hear your comments and whether you agree with the motion or not.
http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=37446&SESSION=899
That this House notes the disproportionate impact on building societies of the Financial Services Compensation Scheme (FSCS) levy, resulting from the failure of Bradford and Bingley plc, the Icelandic banks and London Scottish Bank; recognises that building societies' share of the levy, approximately £200 million per annum in each of the next three years, is equivalent to about 15 per cent. of the sector's pre-tax profit for 2007-08 financial year ends; notes that building societies' share of the levy for years beyond 2011 is uncertain, but could well be higher than £200 million per annum; acknowledges that the impact on building societies contrasts starkly with the banking sector, where the FSCS levy is typically well below five per cent. of pre-tax profits over a similar accounting period; further notes that the current allocation of the FSCS levy works to the detriment of building societies' members, their savers and borrowers; acknowledges that no building society has ever made a call on the FSCS or its predecessor schemes; and calls on the Government to introduce a more equitable scheme for funding the insurance of deposits of failed banks.
For example when B&B transferred its savings book to Abbey Santander, the retail funds required for the £18 billion worth of balances held by customers were simply not there. So a call was made on the Financial Services Compensation Scheme (FSCS) for all the balances covered up to the £35,000 limit as it was at the time. This was estimated to be £14 billion. The remaining (uncovered) £4 billion was funded by the treasury and therefore ultimately the tax payer.
The FSCS is funded by levies from the UK deposit takers, so we all have to pay. The irony is that the failed institutions relied heavily on wholesale funding markets which ultimately, significantly contributed to their demise, but the Building Society sector is heavily retail funded. Saffron Building Society in fact holds more retails savings balances than it lends in mortgages. Due to this the sector is now having to bear a greater percentage cost of the levy than the banks. This seems an unreasonable penalty for prudent policies.
Whilst for us the amount involved will not reduce our annual profits below acceptable levels, it will cost us in excess of £1 million from 2008 profits, with further amounts payable in future years.
Therefore I have today written to all of our local MP’s asking them to support an early day motion read recently by Ann Cryer MP.
Motion 426, Financial Services Compensation Scheme Levy on Building Societies, raises some very important concerns of both Saffron Building Society and the entire building society sector. I have provided a copy of the text of the reading below.
I don’t want this to sound like sour grapes, but building societies typically run more traditional and less complex business models than banks. We are naturally risk averse and prudent in looking after our member’s money and because of this our levies are disproportionately high……
I would love to hear your comments and whether you agree with the motion or not.
http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=37446&SESSION=899
That this House notes the disproportionate impact on building societies of the Financial Services Compensation Scheme (FSCS) levy, resulting from the failure of Bradford and Bingley plc, the Icelandic banks and London Scottish Bank; recognises that building societies' share of the levy, approximately £200 million per annum in each of the next three years, is equivalent to about 15 per cent. of the sector's pre-tax profit for 2007-08 financial year ends; notes that building societies' share of the levy for years beyond 2011 is uncertain, but could well be higher than £200 million per annum; acknowledges that the impact on building societies contrasts starkly with the banking sector, where the FSCS levy is typically well below five per cent. of pre-tax profits over a similar accounting period; further notes that the current allocation of the FSCS levy works to the detriment of building societies' members, their savers and borrowers; acknowledges that no building society has ever made a call on the FSCS or its predecessor schemes; and calls on the Government to introduce a more equitable scheme for funding the insurance of deposits of failed banks.
Tuesday, 3 February 2009
No financial news to start February....
Whilst bad weather can create problems for many, including the 6 million estimated people who took the day off work yesterday; it was at least a welcome break from recession and finance news, with all the major media focusing on the snow that gripped the UK.
IT seems that the further dumpings expected, on the whole did not happen and aside from exercising caution on the ice, most people ventured off to work as normal this morning.
Yesterday I mentioned that I was going to Sandringham to meet the Queen and I must tell you that she was genuinely lovely. She made the effort to speak to everybody present at the event and despite the snowy conditions at the Sandrigham Estate, still stayed at the vistor centre for over an hour.
The drive home gave me some time to reflect on how regimented her life must be, body guards, maximum security and endless public engagments. Certainly one for me to keep in perspective when stuck in traffic or worse still moaning about snow making it hard to get to work.
Monday, 2 February 2009
Snow and the Queen
Well travelling today has been a nightmare for many, fortunately I have been working from home this morning, however I am about to journey to Sandringham to meet Her Majesty the Queen.
My wife Helen and I are representing the building society at a function at Sandringham in aid of Campaign Care 94, a charity that we sponsor in a small way, due to our agency representation in the Sandringham area.
We are both really looking forward to it, except for the fact that further snow is forecast and I don't want to be late for such an important meeting.
We have had to accept a couple of branches of ours not opening today, Stratford and Brentwood, and my Executive team are watching the weather carefully to see if we need to close others early. Many of our staff come from rural locations and I don't like the thought of them stranded on their journeys home.
My wife Helen and I are representing the building society at a function at Sandringham in aid of Campaign Care 94, a charity that we sponsor in a small way, due to our agency representation in the Sandringham area.
We are both really looking forward to it, except for the fact that further snow is forecast and I don't want to be late for such an important meeting.
We have had to accept a couple of branches of ours not opening today, Stratford and Brentwood, and my Executive team are watching the weather carefully to see if we need to close others early. Many of our staff come from rural locations and I don't like the thought of them stranded on their journeys home.
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