Events
Speech
BSA Annual Lecture 2008 - "Beat the Banks" by Paul Lewis
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Contact: Christie Sharp Date: 21 Oct 2008 |
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Hello.
As John Goodfellow kindly said I’m Paul Lewis a freelance financial journalist, although best known I guess for my work presenting Money Box on Radio 4. But I am not here representing Money Box or, god forbid, the BBC. I am here as myself and the opinions and comments I make are mine alone.
I’m calling today’s lecture ‘Beat the Banks’. The title was in my mind because I had just been discussing an update to this book – on which incidentally I earn no royalties, it’s published by Age Concern so if you buy one the charity gets the money not me – which I called Beat the Banks.
And before you all feel smug, I have to tell you this was a small volume. And in fact I would have called it ‘Beat the Banks and Building Societies’ but there wasn’t room. Because it’s partly about avoiding the tricks that banks – and building societies – play on us to take money off us. And in many areas there isn’t really that much difference between banks and building societies.
Today I want to talk to you about making that difference. About how mutuals can beat the banks. But I have scrapped large parts of that lecture. Because I cannot really stand up in front of an audience now without talking about the world banking crisis. Every day when I have sat down to carry on writing this lecture I have had to go back to the beginning as banks crashed or were nationalised or both and I had to rewrite the start.
Governments have stepped in with yet more eye watering sums of money. And stock markets have illustrated the old saying that share prices can go down as well as plummet.
Over the last month I did wonder if I would have to rename it ‘Beat the Bank’! Because it has been a week by week Wall Street game show called Last Bank Standing.
It started with a double act – the comedy twins Fannie Mae and Freddie Mac. No-one had heard of them but on Sunday 7th September we were told they had disappeared into Federal Reserve.
The next Sunday 14th September Lehman Brothers went bust and then Merrill Lynch was rescued.
Since then every Sunday a crisis has removed another player – sometimes several. The game became so popular that midweek episodes began. It crossed the Atlantic to the UK and then Europe. Two Sundays ago the song and dance duo Bradford & Bingley collapsed. Then in Europe Dexia was rescued. And after the next weekend’s crisis talks first Landsbanki and then Kaupthing fell. And then this weekend of course the Government effectively nationalised Royal Bank of Scotland and took a 40% stake and two board places in HBOS.
And then as I was putting what I might grandly call the finishing touches to it the US government decided that $700 billion was nothing like enough and committed another $250 billion to taking stakes in eight of its remaining banks. And just this morning we heard that the Swiss Government had put $30 billion to buy the duff assets of UBS.
Read the full speech by downloading the text in PDF format (see link below)
