Deborah Hargreaves has published a column in the Guardian that supports the idea of a New Deal Bank. She says:
The [financial services] industry must surely see an opportunity for a high street ethical bank or savings company. A model could be the Co-operative Bank. It would be a bank that promised to treat its customers fairly - and meant it. It would need to steer away from complicated, unstable financial products. Even more radical, the bank could promise to pay its top executives only a set ratio over average earnings.
She hasn't fleshed the idea out as much as I have, but I'm sure the time for this is nigh.
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Richard,
If this model of banking is profitable, why isn’t it done in a widespread fashion today? Yesterday? Five years ago? etc?
I think the building societies beat you to this idea by a considerable number of years
Alastair
No they didn’t
Most use bulk funding
I’m not suggesting investing in mortgages
Fundamentally different, therefore
Richard
Interesting to look at the other side of the balance sheet, but I was referring to their retail funding businesses. What they do with the money is not where you are at I would agree.