Some are questioning whether the financial turmoil has rendered the Bank of England powerless to direct how much the biggest financial names on the High Street charge for credit and pay customers for their deposits. For many, today’s predicted cut in base rate will be meaningless. While banks and building societies have been cutting savings rates, they have also been raising mortgage rates for new borrowers. The only people to benefit would be existing mortgage customers on the track rates which follows the movement of the base rate. The current market turmoil could however be providing banks and building societies with the opportunity to rebuild their profit margins after being hit (at various levels) by the subprime market. Once again, the consumers are paying for the cost of the financial industries’ imprudence.
Posts Tagged ‘banks’
Has the Bank of England lost control?
Thursday, April 10th, 2008How will banks recoup their dented profit margins?
Tuesday, December 18th, 2007The banks always find various ways to recoup losses through their customers. When credit card charges had to be reduced from as high as £39 to £12, some responded by tagging on an annual fee, some have already started fining customers who are in credit and other like RBS reduced the interest free period their customers have before payments are due. And there have been many others setbacks; mortgage exit fees, miss-sold Payment Protection Insurance (PPI), various bank account charges, and now the US sub-prime mortgage crisis. They have already started by increasing mortgage arrangement fees to as high as 4% of the loan. The banks are very shrewd in finding various ways to pass the buck!
