Banks: interesting view from Duncan Bannatyne...

[MPwannadecentincome]

http://business.timesonline.co.uk/to...cle5733424.ece

We need to stop the banks lending to each other.” Isn’t one of the economy’s main problems that inter-bank lending has all but collapsed? “No, no, no. The system would be much better if they stopped lending to each other. They’re just sending the same pot of money around and around and every time someone takes commission out of it. I don’t see why they do it . . . Supermarkets don’t lend fruit and veg to each other.

So that's why the govt. need to rescue so many banks!

I don’t want Bank A to lend to Bank B to lend to Bank C. I want them to lend to me!

Just like recessions make companies look at their organisational structures and strip out layers of management, shouldn't banks do the same and strip out some of the middlemen?

[BrilloPad]

http://business.timesonline.co.uk/to...cle5733424.ece



So that's why the govt. need to rescue so many banks!



Just like recessions make companies look at their organisational structures and strip out layers of management, shouldn't banks do the same and strip out some of the middlemen?

There often are no middlemen. And the banks only borrow/lend when they need to/have excess funds.

If Bannatyne thinks it is so easy he should open a bank.

[Dante]

Agreed - stick to simple business models a la Ice Cream vans and Reggae-Reggae sauce you gobtulipe sweaty-sock!

[jkoder]

Never rated DB much, he's certainly not Alan Sugar or Richard Branson. I guess his comments go along way to explaining this.

[Doggy Styles]

Hold on. If banks weren't allowed to lend to each other, they'd all have to ensure that their funds were solvent. That is, that they don't lend more than they've got in deposits.

Why is that a bad thing?

[MPwannadecentincome]

The supermarket analogy does not hold well methinks - I imagine not all banks are like supermarkets. Some may be, but others are probably more like smaller grocery stores who have to buy fruit and veg from a wholesaler, so I can see the need for wholesale banks and retail banks.

[MPwannadecentincome]

Hold on. If banks weren't allowed to lend to each other, they'd all have to ensure that their funds were solvent. That is, that they don't lend more than they've got in deposits.

Why is that a bad thing?

Because no one bank can get enough in CASH deposits to fund all the loans the bank feels it needs to make to ensure sufficient profits are made to justify the really big bonuses they want to pay. So, its bad for the bankers!

[MPwannadecentincome]

There often are no middlemen. And the banks only borrow/lend when they need to/have excess funds.

If Bannatyne thinks it is so easy he should open a bank.

so are you saying this A lending to B lending to C thing doesn't really happen?

[Liability]

Someone needs to tell him where we are with this - and then order him out!

[Dark Black]

Never rated DB much, he's certainly not Alan Sugar or Richard Branson. I guess his comments go along way to explaining this.

I'm willing to bet he makes a shed more money than you do though mate...