HSBC - falling apart?

[ATM]

67Dino said:

It is true that deposits are not the only form of liquidity that banks need to lend. The wholesale markets are another source. I wonder if this is what is causing you to think it’s infinite?

I didn't say it is infinite. I understand there are rules and its not simple. I know there is a fractional reserve where banks need to have about £3 for every £100 they want to make in new money. I'm just trying to get the point across to those who didn't know about this already. If the conditions are met and the rules are followed then a bank can make new money to give someone as a loan. Most people believe a bank can only lend out what it already has. This isn't true because a bank can make new money if it follows the rules. Banks can make new money. Banks do make new money.

[67Dino]

Thinking about it, this line of argument comes from same school of thought that makes people think contactless cards are a conspiracy by the banks to stop people having money...

[loafer123]

ATM said:

67Dino said:

It is true that deposits are not the only form of liquidity that banks need to lend. The wholesale markets are another source. I wonder if this is what is causing you to think it’s infinite?

I didn't say it is infinite. I understand there are rules and its not simple. I know there is a fractional reserve where banks need to have about £3 for every £100 they want to make in new money. I'm just trying to get the point across to those who didn't know about this already. If the conditions are met and the rules are followed then a bank can make new money to give someone as a loan. Most people believe a bank can only lend out what it already has. This isn't true because a bank can make new money if it follows the rules. Banks can make new money. Banks do make new money.

How about this;

Firstly, it is £100 for every £10 of capital;

Secondly, they can create as much money as they like as long as they can borrow it from depositors and other banks, and keep within the first rule.

[randlemarcus]

ATM said:

I didn't say it is infinite. I understand there are rules and its not simple. I know there is a fractional reserve where banks need to have about £3 for every £100 they want to make in new money. I'm just trying to get the point across to those who didn't know about this already. If the conditions are met and the rules are followed then a bank can make new money to give someone as a loan. Most people believe a bank can only lend out what it already has. This isn't true because a bank can make new money if it follows the rules. Banks can make new money. Banks do make new money.

Only if they weren't paying attention in school. Am sure that fractional reserves were OLevel stuff.

[67Dino]

ATM said:

67Dino said:

It is true that deposits are not the only form of liquidity that banks need to lend. The wholesale markets are another source. I wonder if this is what is causing you to think it’s infinite?

I didn't say it is infinite. I understand there are rules and its not simple. I know there is a fractional reserve where banks need to have about £3 for every £100 they want to make in new money. I'm just trying to get the point across to those who didn't know about this already. If the conditions are met and the rules are followed then a bank can make new money to give someone as a loan. Most people believe a bank can only lend out what it already has. This isn't true because a bank can make new money if it follows the rules. Banks can make new money. Banks do make new money.

That’s good, as if it was infinite it would be ‘magic’. As long as what you’re talking about is highly leveraged generation of profit, but still bounded, then it makes sense to me.

[lothianJim]

No idea what this thread is about, but HSBC have been trying to close my biz account for a few years now. Crappy customer service is just one of the tools they use. Others include 'fraud prevention', and out right lies like 'no we don't give you BACS access or a replacement bank fob'.

I can only assume current accounts in UK are loss leaders they want rid of.

[loafer123]

lothianJim said:

No idea what this thread is about, but HSBC have been trying to close my biz account for a few years now. Crappy customer service is just one of the tools they use. Others include 'fraud prevention', and out right lies like 'no we don't give you BACS access or a replacement bank fob'.

I can only assume current accounts in UK are loss leaders they want rid of.

Yes...they closed my wife’s business account because she exports...more fool them - where do they expect their next successful customer to come from?!

[Kent Border Kenny]

ATM said:

I dont know why they go bust. Is that better?

Until you get past the idea of banks making up money you can't possibly truly understand what the credit crunch was all about. They started making up too much money too quickly. That is it.

Maybe you know more about the credit crunch than I do, maybe you don’t.

I admit that I wasn’t trading mortgage debt for a major investment bank in 2007/8, but the guy who sat directly behind me was, so I did hear everything that was going on on the desk, see their positions, and their daily P&L, which is a decent source.

Where is your better knowledge coming from?

[Kent Border Kenny]

loafer123 said:

Yes...they closed my wife’s business account because she exports...more fool them - where do they expect their next successful customer to come from?!

Given the fact that they were fined billions of pounds for insufficient KYC, and it’d only take a couple of further cases for the same to happen again, the loss of a few thousand pounds profit is neither here nor them for them.

It’s unfortunate that customers like your wife have to suffer because of it.

[ATM]

randlemarcus said:

ATM said:

I didn't say it is infinite. I understand there are rules and its not simple. I know there is a fractional reserve where banks need to have about £3 for every £100 they want to make in new money. I'm just trying to get the point across to those who didn't know about this already. If the conditions are met and the rules are followed then a bank can make new money to give someone as a loan. Most people believe a bank can only lend out what it already has. This isn't true because a bank can make new money if it follows the rules. Banks can make new money. Banks do make new money.

Only if they weren't paying attention in school. Am sure that fractional reserves were OLevel stuff.

I didn't hear about it until 2009 2010. And only because someone was trying to explain the credit crunch to me in layman's terms. Up until that point I believed the money they gave to borrowers was one to one with the money from savers.

I guarantee a lot of readers here dont know this is standard practice. Hence why they call me a troll. They don't know banks can just make this magic money and some are not even willing to believe it.

[loafer123]

Kent Border Kenny said:

loafer123 said:

Yes...they closed my wife’s business account because she exports...more fool them - where do they expect their next successful customer to come from?!

Given the fact that they were fined billions of pounds for insufficient KYC, and it’d only take a couple of further cases for the same to happen again, the loss of a few thousand pounds profit is neither here nor them for them.

It’s unfortunate that customers like your wife have to suffer because of it.

I get that, but it was a failure of their systems, resulting in penalising their customers.

One would think sorting their systems would be the better answer.

[Kent Border Kenny]

loafer123 said:

I get that, but it was a failure of their systems, resulting in penalising their customers.

One would think sorting their systems would be the better answer.

They have, but are still acting with great caution.

[loafer123]

Kent Border Kenny said:

loafer123 said:

I get that, but it was a failure of their systems, resulting in penalising their customers.

One would think sorting their systems would be the better answer.

They have, but are still acting with great caution.

Their problem is that people like me will never use them again.

I have quite a broad range of roles and specifically ensure those businesses do not use HSBC because they present a direct business risk not endured elsewhere.

[Louis Balfour]

loafer123 said:

Kent Border Kenny said:

loafer123 said:

I get that, but it was a failure of their systems, resulting in penalising their customers.

One would think sorting their systems would be the better answer.

They have, but are still acting with great caution.

Their problem is that people like me will never use them again.

I have quite a broad range of roles and specifically ensure those businesses do not use HSBC because they present a direct business risk not endured elsewhere.

I am in the same boat. Where are you thinking of placing business?

[loafer123]

Louis Balfour said:

loafer123 said:

Kent Border Kenny said:

loafer123 said:

I get that, but it was a failure of their systems, resulting in penalising their customers.

One would think sorting their systems would be the better answer.

They have, but are still acting with great caution.

Their problem is that people like me will never use them again.

I have quite a broad range of roles and specifically ensure those businesses do not use HSBC because they present a direct business risk not endured elsewhere.

I am in the same boat. Where are you thinking of placing business?

The business which got dumped on by HSBC moved to Metro, which seems decent so far.

[Louis Balfour]

loafer123 said:

Louis Balfour said:

loafer123 said:

Kent Border Kenny said:

loafer123 said:

I get that, but it was a failure of their systems, resulting in penalising their customers.

One would think sorting their systems would be the better answer.

They have, but are still acting with great caution.

Their problem is that people like me will never use them again.

I have quite a broad range of roles and specifically ensure those businesses do not use HSBC because they present a direct business risk not endured elsewhere.

I am in the same boat. Where are you thinking of placing business?

The business which got dumped on by HSBC moved to Metro, which seems decent so far.

They are not physically represented near us. They also had some issues of their own recently didn't they?

Of the usual rogues gallery I am wondering about Nat West.

I would like to move to a "premium" bank at cost, but I am essentially a tightwad so it won't happen.

[loafer123]

Louis Balfour said:

They are not physically represented near us. They also had some issues of their own recently didn't they?

Of the usual rogues gallery I am wondering about Nat West.

I would like to move to a "premium" bank at cost, but I am essentially a tightwad so it won't happen.

One of my other businesses uses them...great people, but their online system is very painful to use.

[Louis Balfour]

loafer123 said:

Louis Balfour said:

They are not physically represented near us. They also had some issues of their own recently didn't they?

Of the usual rogues gallery I am wondering about Nat West.

I would like to move to a "premium" bank at cost, but I am essentially a tightwad so it won't happen.

One of my other businesses uses them...great people, but their online system is very painful to use.

Yes. When my young son had issues with them recently they genuinely seemed to give a st and compensated him in the sum of £200, which for a young lad is like winning the lottery.

My children all have Nat West personal accounts and they are FAIRLY easy to operate.

We also deal with Lombard, part of the group, and they are OK. Just OK.

So, do we run with a bank that messes up, cares that they have messed up and seeks to resolve it?


As opposed to HSBC that messes up, doesn't give a flying fk and cannot even be arsed to reply to correspondence on the subject.

[NickCQ]

Kent Border Kenny said:

ATM said:

They started making up too much money too quickly.

Maybe you know more about the credit crunch than I do, maybe you don’t.
Where is your better knowledge coming from?

There is a grain of truth in what he is saying, to the extent that excess leverage in the US housing market caused a house price bubble that deflated quickly and blew up CDO structures, SIVs, BNP / Bear mortgage hedge funds and the rest of it.

The irony, though, is that most of this happened in the shadow banking system (i.e. RMBS / CDO etc) rather than on 'magical money-generating' bank balance sheets!

[Scootersp]

ATM said:

I didn't hear about it until 2009 2010. And only because someone was trying to explain the credit crunch to me in layman's terms. Up until that point I believed the money they gave to borrowers was one to one with the money from savers.

I guarantee a lot of readers here dont know this is standard practice. Hence why they call me a troll. They don't know banks can just make this magic money and some are not even willing to believe it.

Maybe not a lot of readers here in the finance section, but yes I agree in the general populace etc there is a massive lack of understanding. In all areas of life there are things we assume is 'basic' knowledge and this varies massively, you might know all about fractional reserve banking, but zero about something else that another person (ignorant of the banking system) thinks is equally incredulous!

Unless you're an egghead or chaser you can't know everything. Arguable more people should know this as it's perhaps more important although most just have some money in the bank and occasionally want to borrow some more, and banks are custodians and facilitators. The whole banking world beyond the simple current accounts loans etc is not easy to explain to even the intelligent layman.