A new banking scandal is emerging. As the Guardian reports:
An epidemic of errors in credit and loan agreements is the latest expensive scandal to hit the banking sector, with the cost already approaching £1bn. HSBC disclosed on Monday that it is setting aside hundreds of millions of pounds to refund customers for mistakes made in paperwork.
It has to be made clear that the mistakes the banks made are not on high risk transactions. Nor are they on complicated issues. They relate to things like forgetting to tell people how much they ave borrowed on bank loan statements, and that they have the right to repay the loan early if they want. That's the sort of thing covered by routine regulations and which can be got right by comparing the bank's statements to a pre-prepared check list. But it looks like no one did it. The result is that the banks charged interest illegally.
Now you can say anyone can make a mistake, and that's true, of course. But in this case it's not anyone making a mistake. It's lots of banks making these mistakes apparently and the clear implication is that, yet again ordinary customer's interests may have been prejudiced. That's important.
As important is the fact that this is hardly the first such mistake. PPI rolls on still.
More important still though is who is making the mistake. Bankers are the supposed all seeing, all powerful, all knowledgeable brains of the universe. And they cannot design simple forms, or even apparently comprehend the need to do so. Now consider that these same banks have derivatives outstanding at any time for sums vastly greater than the entire world's GDP which if they go wrong could plunge the whole world economy into a tail spin in a few hours. They can't prepare a bank statement but we trust them to do that. The question does have to be asked, are we mad?