The spend, spend, spend culture of recent years has resulted in a huge amount of debt which is affecting everyone. Savers who demonstrated restraint, thrift and forward thinking during a culture of cheap debt are now receiving near zero returns on their savings. The …
It is now widely predicted that the Bank of England will raise the base rate sooner rather than later. Inflation is on the increase and the base rate can’t remain this low for ever, can it? When Japan reduced its base rate to 0.5% in 1995 nobody expected it to …
Einstein is reputed to have said that compound interest is the most powerful force in the universe. He could equally well have said that inflation is the most destructive. Oil up 15%, bread 4.9%, coffee 9%, VAT 2.5% these are a few of the price rise that have recently made …
A sign of the anger and frustration felt by UK savers at the low interest rates on offer is the number of people who write in suggesting that we organise a mass cash withdrawal from the banks.
The idea of a bank boycott of this sort raises all sorts of practical issues. But the main one is how to get a large enough number of people to participate order to have an effect.
People often cite the example of Northern Rock; the run on Northern Rock was sparked by a news report that it had approached the Bank of England for financial support. These savers were prepared to queue up for hours because they were rescuing their savings which they were at risk of losing.
Massive bank runs also occurred in February 2009 against the banks owned by Texan Billionaire Allen Stanford in Antigua and Venezuela after he was accused of fraud. Again savers were in danger of losing their savings.
A similar example occurred last October, in the Netherlands, when Pieter Lakeman of the Mortgage Grievances Foundation appeared on television and said that it was in savers best interests to move their money out of the Dutch bank DSB. This lead to a chain of events that totally undermined savers confidence in the bank and resulted in a mass withdrawal of 600 Million Euros and the Bank ending up in receivership. Mr Lakeman had been protesting on behalf of borrowers many of who had suffered at the hands of the banks aggressive lending policies and were in severe financial problems after borrowing more than they could afford.
So savers will react if they are at risk of suffering personal financial loss. But are people prepared to move their money as a means of protest? In what seems to have started out as a reaction against the massive political and economic influence of the banks an idea for an organised bank run that was suggested by a German blog site called “All is smoke and mirrors” has now become a European wide movement.
Some French activists have picked up on the idea and are using it as part of their campaign against the French Government’s austerity measures. They have a web site stopbanque.blogspot that calls for a mass withdrawal on 7th December.
There is an British facebook page promoting the withdrawal as well as ones for Germany, Italy, Greece, Netherlands, Denmark and Portugal
I suspect this time around it will not gain enough momentum to cause any damage, but politicians would be foolish not to take notice. People are rightfully angry. It is ordinary people who are continung to pay the price for the banks part in the financial crisis and many of them are becoming increasing angry.