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personal experience
Do Banks And Governments Have Any Right To Judge Our Use Of Money
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Do Banks And Governments Have Any Right to Judge Our Use Of Money

As some of the major economies around the would start to show signs of recovering from the damage done by their political leaders and the banks that run their economies, we are starting to get a good look at how they have been behaving.

But first a little personal experience. A couple of years after the launch of the Euro one of my clients paid me with a 500 Euro note. Nothing wrong with that he had been invoiced for the same amount. The next day I took the money to my British bank, Lloyds. I wanted to deposit it into my GBP account. I was advised that I could not do that. It was not allowed due to “money laundering regulations”. I was presented with two options.

(a) Exchange it at the currency exchange and then deposit the converted value. The exchange rate was not good so I declined this, simple profiteering. But how is this different than just putting it into my account I wondered?

(b) Open a Euro account at the branch and I could deposit it, in the account. As usual I would need to bring along suitable documentation so I declined this as it was too complicated and I did not need a UK based Euro account.

So I left the bank unhappy, puzzled and still with 500 Euros in my pocket. My company did a small amount of business in Europe and because of this we had a Eurozone based Euro account, in Finland. When back in my office I wrote a covering letter, popped it and the cash into an envelope and mailed it to the bank in Finland. Just over a week later they mailed it back stating that they could not accept cash payments unless in person. At this point I did not know whether to laugh or cry. Not wanting to waste any more time on this, the money was put into petty cash and used on a future business trip to a country where I could spend it.

Let’s just take a moment to look at some of the wonderful behaviour of banks over recent, days, weeks and years.

(a) Royal Bank of Scotland (RBS) paid 49 billion GBP for ABN Amro bank which turned out to be worth a fraction of that. RBS did it, the British Financial Services Authority let it happen and the British tax payer then had to bail out the bank to the tune of 45 billion GBP

(b) Swiss bank UBS fined 620 million GBP over fixing of interbank lending rate Libor

(c) HSBC fined 1.9 billion USD for money laundering

(d) Northern Rock victim of the first run on a British bank since 1866

(e) Bank failures in Spain due to non performing property loans where many of the assets are worthless or worth a fraction of the loan value

(f) French bank Societe Generale loses 4.9 billion Euros due to a rogue trader

(g) Swiss bank UBS loses 1.9 billion GBP due to a rogue trader

(h) Barclays bank fined 360 million USD by US authorities and a further 59.5 million GBP by the UK Financial Services Authority for attempted manipulation of the Libor and Euribor rates

That is the short list not including those who have admitted guilt but are waiting for punishment and others!

Clearly it is not an issue of “cultural behaviour” of one country or a couple of dodgy banks in countries no-one has ever heard of. These are the “great and the good” overseen by supposedly credible Governments, Banking organisations like the Bank of England and others like the Financial Services Authority. Banking is a very old industry, it employs hundreds of thousands if not millions of people worldwide so surely they should know what they are doing by now. They have computer systems that run everything and yet it would appear banking is rotten to its core.

How ironic that they judge us and make decisions which impact on our daily lives. We are the ones running around dancing to their tune. Tax payers, businesses and consumers all over the world foot the bill. Did the recent financial meltdown expose recent bad behaviour or is it, that this is how they have always behaved and now we know?

Street Talk

HI Rob, I think these institutions are overstepping their mandates. I don't see how they have the right to "manage" your money.

  about 9 years ago

Thanks for reading and comments

  about 9 years ago

you are welcome

  about 9 years ago
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