A Bank You Could Trust

No, this is not a contradiction in terms! As regular visitors to this blog will know, I am a strong supporter of the re-establishment of the Birmingham Municipal Bank – and similar publicly owned banks elsewhere - as a safe and trustworthy haven for the savings, small and large, of the people of the city and nearby areas.
The fundamental values of the Municipal Bank would exclude pressurising of customers and needless chopping and changing of frivolous and misleading financial ‘products’, slippery small print, hidden charges and other devices of the trickster.
In such a bank, the simple principle of constancy would prevail. And in my view people throughout the country should be pressing for the re-introduction of Municipal Banks for their areas too. There is opportunity amidst the present crisis - there is a clear gap in the ‘market’ for plain, honest, straightforward savings banks.
Sometimes there’s a value in being unsophisticated - a remark originally attributed to RBS. There most certainly is, and bankers should know this better than anyone. But I suspect that reform for them will be well nigh impossible - their deeply ingrained habits are very hard to drop altogether. Incidentally, an old meaning of the word ‘sophisticated’ is ‘corrupt’ - which I think serves to underline the point.
Constancy and confidence were the values on which most of the true wealth of this country, much of it, alas, now cast to the winds, was built and which other institutions, such as the Municipal Banks and National Savings, sought to complement and support.
Is it too much to suppose that these fundamental principles might be worth rediscovering and implementing again today? They have not been lost by the majority of our population, but are hard if not impossible to find in the financial sector.
When the Birmingham Municipal Bank was first established in the early part of the last century, it faced significant opposition from the commercial banks – no surprise there. We are beset with austerity but the need is as pressing as ever. One tactic today from the various quarters opposed to the idea, is to frighten the horses by waving around large numbers, which are claimed to represent costs.
It is also suggested that commercial banks can provide any required service. The very same banks that, as one developer told me, had pulled out of financing over 90% of their viable projects and put at risk the jobs that would have been created. And these are the very same banks that have taken the Queen’s shilling - or rather billions - are effectively owned by the public, but who are refusing to do their bit for the economy and the country that has sustained them.
They are not to be trusted, and I still hope that a way will be found to once more offer ‘Security with Interest’ (the motto of the former Birmingham Municipal Bank) and attract the trust of the citizens of Birmingham. Such a service is widely desired amongst ordinary, respectable people.
Perhaps if a lead is given by Birmingham, there could be Local Authority led banks throughout the country. Having such ‘exemplars’ might force a change in the behaviour of commercial banks for the many years needed to bring in a new generation of ‘unsophisticated’ bankers who will not need enforcement to conduct their business in the public interest.