A possible end to free banking - good for Bitcoin?

[DooMAD]

It seems we still haven't given banks a big enough bailout and the ability to print money from thin air isn't enough to keep them profitable.  So now it looks like they might start charging us for the "benefit" of handing all our money over to them to "look after".  As if diminishing interest rates weren't bad enough.  Does anyone else thing we might get a surge of public interest if this happens?

http://uk.reuters.com/article/2015/02/02/uk-britain-banks-charges-idUKKBN0L600D20150202

[redhack]

That's ridiculous. I think UK citizens need to be awared of Bitcoin and whole cryptocurrency ecosystem.

[DooMAD]

That's ridiculous. I think UK citizens need to be awared of Bitcoin and whole cryptocurrency ecosystem.

I doubt it would remain solely a UK problem for long.  Most banks are now multinational companies.  As soon as they know they can start charging in one place and people are silly enough to go along with it, they'll try in other places too.

[runam0k]

It's inevitable.

Love this: "[not paying fees] increases the risk of future mis-selling scandals" -- WTF?  Reminds me of when the government tried to pay teenage tearaways to not commit crimes/be anti-social.  Needless to say it didn't work and banks are even less likely to change their ways for the slow trickle of account fees.

[pawel7777]

It seems we still haven't given banks a big enough bailout and the ability to print money from thin air isn't enough to keep them profitable.  So now it looks like they might start charging us for the "benefit" of handing all our money over to them to "look after".  As if diminishing interest rates weren't bad enough.  Does anyone else thing we might get a surge of public interest if this happens?

http://uk.reuters.com/article/2015/02/02/uk-britain-banks-charges-idUKKBN0L600D20150202

This is one of the most idiotic statements I've read lately:

But the policy remains controversial and some politicians, regulators and bankers have called for it to end, so banks don't try to squeeze profits from customers elsewhere. They say ending it would make charges more transparent and improve competition and levels of service.

Steve Davies, retail banking leader at PwC, said current accounts were not as free as they seemed.

"UK current accounts are not free at all and are paid for through overdraft charges, penalty fees and uncompetitive or zero rates of interest," said Davies.

Why treat customers as a bunch of retards, instead of letting them choose whether they prefer free account with less interest, or more interest + monthly charge? Let everyone decide what's best for them.

Maybe better idea would be to enforce banks to be more transparent with their fees, or even force them to suggest better deals, prevent them from mis-selling and closing/freezing accounts without giving any reasons etc?

If you force bankers to charge a fee, what would prevent them from 'trying to squeeze profits from customers elsewhere' anyway?

There will be no direct impact on Bitcoin. People won't be able to switch to bitcoin instead of using banks. Bitcoin is not there yet and you pretty much have to have a bank account (practically impossible to live without one for any adult, working person).

The only impact I can see is that things like that add up to the general disappointment with financial institutions, which pushes people to explore the alternatives, such as Bitcoin.

[countryfree]

Nothing new here, in many banks, paying a small fee is normal practice to get an account, unless you keep a permanent minimum balance over say, €5,000. And I suppose you don't know the banks for the rich. There are banks which give free credit cards, and free drinks when you visit, but you must keep over €100,000 on your account...

[pawel7777]

Nothing new here, in many banks, paying a small fee is normal practice to get an account, unless you keep a permanent minimum balance over say, €5,000. And I suppose you don't know the banks for the rich. There are banks which give free credit cards, and free drinks when you visit, but you must keep over €100,000 on your account...

Huh? I'm far from being rich, but I got free banking account (UK) without balance requirement, free credit card, no interest if you pay it off in the first month (pretty standard) and if you want to chat with your bank manager, they would usually offer you a free drink, that's called a good manners.

[DooMAD]

There will be no direct impact on Bitcoin. People won't be able to switch to bitcoin instead of using banks. Bitcoin is not there yet and you pretty much have to have a bank account (practically impossible to live without one for any adult, working person).

The only impact I can see is that things like that add up to the general disappointment with financial institutions, which pushes people to explore the alternatives, such as Bitcoin.

I don't imagine we're anywhere near the point where people would completely abandon the legacy financial system, assuming that day ever comes at all.  Banks might be morally bankrupt, but unless they really screw things up, people are still going to use them for the foreseeable future because it's all they've ever known.  But any negative public reaction about banks is potentially Bitcoin's gain.

[pawel7777]

I don't imagine we're anywhere near the point where people would completely abandon the legacy financial system, assuming that day ever comes at all.
...

Bitcoin is not going to ever replace current financial system (unless in some post-apocalyptic scenario) and I'm perfectly happy with that. I don't want it to become one 'world's official' currency, that would mean that people would be forced to use it and that's not the point. I'd rather see it as a fully functional, but optional, alternative.

It would be ideal if it grows in size to the level of gold/silver markets. Then it would be significant enough to enforce positive changes in the whole monetary/financial system and yet remain as commodity/currency of choice.

[countryfree]

Nothing new here, in many banks, paying a small fee is normal practice to get an account, unless you keep a permanent minimum balance over say, €5,000. And I suppose you don't know the banks for the rich. There are banks which give free credit cards, and free drinks when you visit, but you must keep over €100,000 on your account...

Huh? I'm far from being rich, but I got free banking account (UK) without balance requirement, free credit card, no interest if you pay it off in the first month (pretty standard) and if you want to chat with your bank manager, they would usually offer you a free drink, that's called a good manners.

You may not be aware of it, but you should consider yourself quite lucky. I suppose you've been with your bank for a while.

[cozk]

So, not only we lend them our money for free so they can re-lend it and make a certain % of interest on our back but now we have to pay them ?

So we pay them for what service exactly? The service of making money for themselves out of our money ? geez thanks.

Makes sense. derp derp.

[neurotypical]

People's not going to trust Bitcoin when you can lose 80% of your wealth in a year. Until Bitcoin is more stable is useless unless you want to be a pioneer.

[zimmah]

People's not going to trust Bitcoin when you can lose 80% of your wealth in a year. Until Bitcoin is more stable is useless unless you want to be a pioneer.

yet they trust fiat currency which can decrease 10% a month.

or even more in some cases.

yes bitcoin is volatile now, but that's only because there's a very small pool of people using it.

once enough people use bitcoin, it will be the most stable currency in human history. More stable even than gold.

[oldbute]

Not going to happen.  I use a local "small" bank that has 30 branches in one state and they do very well providing free deposit accounts. There are 7 banks here with population of 10,000, they all have flash buildings.

"The free banking model stifles innovation and competition," Davies added, noting it also made it difficult for new entrants whose presence many see as vital to increase competition.

Bullshit, if you can't make money off of loans, overdraft, and other fees while providing free accounts, sorry your out competed.

[Q7]

Nothing new to this and that is why we need bitcoin as an alternative. We all thought the money is growing and gaining interest but put into consideration the inflation and how our wealth gets diluted as days gone by, and with more printing, we need to realize the value diminishes in the end.

[oblivi]

Nothing new to this and that is why we need bitcoin as an alternative. We all thought the money is growing and gaining interest but put into consideration the inflation and how our wealth gets diluted as days gone by, and with more printing, we need to realize the value diminishes in the end.

The value of bitcoin is also diminishing. if Bitcoin doesnt become mainstream and stable it will be useless.

[pawel7777]

The value of bitcoin is also diminishing. if Bitcoin doesnt become mainstream and stable it will be useless.
[/quote]

How do you define 'mainstream'? What if adoption rate stays on current level, average is somewhat stable but volatility is high? Would you see any use of bitcoin at all?