So the Bradford and Bingley has failed and is going to be nationalised (at least in part) see BBC NEWS | Business | Treasury to nationalise B&B bank.
Our business editor says the nationalisation and break-up of B&B
represents a momentous event in the history of British banking.
He said: "It will mean that every building society that floated on the
stock market in the wave of demutualisations of the past two decades
will either have collapsed or been sold to a conventional bank."
I think it is about time we abandoned these banks that have failed to behave responsibly. Why don’t we return to mutual societies, co-operatives and credit-unions.
- Association of British Credit Unions Ltd Note that the government are proposing changing the rules about credit unions. Hopefully they won’t repeat the disaster that demutualisations were. See Proposals for a Legislative Reform Order for Credit Unions and Industrial & Provident Societiesin Great Britain.
- There are still mutual Building Societies: Building Societies Association – Members
- There is the co-operative bank which should be a better option than commercial banks, it does at least have an ethical policy. We have used them for years, but these days who knows whether a bank has been stupid with loans. So I have no idea if they are safe & sound.
I am beginning to think we should be exploring starting credit-unions. They seem a much better way of supporting people by encouraging saving, through local loans and through no silly, unsustainable, dodgy attempts to make lots of money in ways that are not based on reality.
Either that or really go back to small local mutual building societies, something of a scale where every member will know people who have mortgages with them, where re-possessions will be of friends and neighbours and so far more will be done to avoid them. Where defaulters on repayments meet the people whose savings are affected. Where there are no credit-cards, no overdraft facilities, no incentives for people to get into debt.
Small local scale would seem to be a much better option for us all.
We also need a way to invest in local business, keep it separate from people’s basic savings and make it about long term sustainable development of a community through local business. A credit union or mutual society for business rather than domestic loans and facilities.
One thing is for sure we need to build on better foundations than the current banking system, something that puts ordinary people back in charge and where their money is not used for crazy risk taking or huge bonuses.
I have done a quick search and have not found any local credit-unions for people in East Northants (update many parts of Northamptonshire are covered by what looks like a council sponsored Credit Union: Northamptonshire: How do I join a Credit Union?), but I see many churches across the country supporting their local credit unions. Maybe we should be doing the same.