Linking The Banking System and The Economy

Marbyn

I was wondering if in the longer term it would be of any use if each of the retail banks considered creating a sub-committee now, possibly comprising of older,retired Bank personnel with good experience, whose members could somehow act as an independent interface between members of the public who are at the coal-face in the real economy, earning wages, communicating with each other, listening to ideas, and knowing what's really out there, and the Bank's Boards of Directors and the Financial Regulator? I have been thinking about this even prior to the explosion of the financial crisis, and now it seems to be more relevant. The situation we find ourselves in as an Economy is such that in order to somehow move forward, would it not help if the people in charge of decision-making had a detailed independent source of information from which to base key decisions regarding the future, especially regarding areas of investment that could prove most profitable? (I mean independent in the sense of there being no personal gain or loss from passing on the information).
I don't know if I mis-heard, but I felt very sorry for a lady I saw on television news who I thought made a comment at a recent Bank AGM that the staff just don't know what to say to people they are coming across in the course of their work who are experiencing a high level of distress. Could this committee not somehow relay information from the coalface to the Boards of Directors, to include details of these types of interactions experienced by staff , so that consequences of policies (lending/savings/investment etc) could be as clearly identified as possible before they are sanctioned or implemented? Would it not also help the Board to get a better handle on its exact lending risk? Sorry that I'm not explaining what I mean so well, but the committee's function could be something similar to Market Research but without a questionnaire, only responses and recommendations for action? This would mean that in addition to economic data or commentary , Banks would have their own source of knowledge of what is really happening out there. Would their forecasting etc not then be more accurate and less risky? Is it not time to go back to conservatism in Banking, but without abandoning calculated risk? Another advantage might be that if a big financial change occurs such as membership of the Euro, contingency plans could be put in place regarding policies in case that there were problems with the currency, because banks would have direct information about the public's concerns/hopes regarding any change. I know that no-one plans for failure, but is it not sensible if you are working in Banking, to accept that money is the oil in the machine of the economy, and so therefore to take wise precautions to make-sure the mechanism remains functioning even if there is a change in the brand being used (Pound V Euro?)

As an aside, can Bank's look again at all aspects of their business, and adjust their marketing and product offerings to consider the types of customers who bank with them? By this I mean for example some people open an account because that's they only way their salary is paid, but they don't particularly aspire to any great increase in earnings over the course of their lifetime, whilst others are hoping to make a good progression in earnings. Was it not a good system when there were different Banks in place to cater for specific sectors of the economy? Would that make regulation easier?

Thanks!

Dob74

Banks have nearly all revelant info on people stored in there database.
They can see all the money coming and going in different industries so I dont think a new commitee would be needed. Anyway the have supposedly independant economic advice from there ecomonic departments.
I would like to see an end to the personal gaurantee system.
If you want to invest in a bussiness you should not have to risk all your assets in one investment. You should have enough of a down payment to cover the banks risk, about 10%.
That would but an end to reckless lending since the bank could only recover the initial investment and not be able to pursue personal assets.
What ever happened to limit liability?

bbam

Marbyn wrote: »

, possibly comprising of older,retired Bank personnel with good experience,

Have to say I'm sick to death of this countries obsession with bringing people back from retirement to sit on soft boards and reviews.
They have earned well during their working life, are sitting on nice large pensions..
Leave them be.. there are 500,000 unemployed in this country and I fail to believe there are non suitable for a position like this or others.. We need to move on with fresh faces and leave the cronies out of our future plans.

Marbyn

I suppose I was thinking more in terms of a personal style of information-gathering, not something simply on paper, where there would be the opportunity to expand on a subject, or pick up useful pieces of additional information not reflected in any data. I was also thinking that this might be in addition to advice from Economists employed by Banks?

Thanks!

Marbyn

Sorry, I should clarify. It would obviously be important that anyone working in such a role would have very strong principles and be able to speak their mind. I am not suggesting any type of cosy set-up or quango.

Marbyn

Have the risks of on-line banking been brought forward for discussion, or is it to be imposed on users of the Banking system without any choice?