When I enter a local bank branch I am at awe: tall ceilings, spacious surroundings, fancy, dark desks and chairs--many standing empty, large, flat screen TVs. The atmosphere reminds me of a child's impression in Mary Poppins, when the son goes to visit his father at the bank. In Mary Poppins, the innocence of a child caused a run on the bank. Today, as the run is about to happen, a child is needed to call out attention to the obvious.
Enter a local bank here in Beverly Hills and you would often have to stand in line. The bank, like the Post Office, is cutting back. So you wait longer. The teller, new to the branch, does not know you. The teller is younger than the number of years you have been banking with the same bank. Tellers and middle management are rotated between branches, so even if a relationship is developed, the person is soon thereafter gone.
Bloomberg reports today that Bank of America, "which has received $45 billion of taxpayers' money, may raise the annual base pay for some managing directors to about $300,000 from $180,000. Salaries for less-senior directors would climb to about $250,000 from $150,000, and vice presidents would get $200,000, up from about $125,000." It pays to be an investment banker, even today.
Our tax money--to the tune of hundreds of billions of dollars--is channeled to bail out financial institutions. They receive it literally interest free, no strings attached and use a hefty portion to pay bonuses to employees. Then they charge us--those bailing them out--at some 2,000% profit. Why should we have to pay 18-24% interest when the inter-bank rate is close to zero? "They" are banks, entities governed by people. Is there no limit at the top of Mount Olympus to one's greed (or long-term stupidity)?
We are at the mercy of the big banks--BofA, Citibank, Wells Fargo. They feel invincible--they are too big, our Government will not let them fail.
Even when the earth started to shudder and the economy to shutter, banks continued their efforts to lure new victims with promises of promotional rates and easy money. Soon horror stories surfaced. Corrective action is yet to be seen.
If banks truly wanted to improve their ways, they would concentrate on basic banking services--encourage people to save, provide basic accounts to which a salary can be deposited and from which checks can be written and bills paid. Have employees know the clients, knowledge which will provide better protection than anything else.
Most importantly, to retain loyal customers, banks would need to invest in their customers' future. Banks should put a moratorium on interest rate hikes and a respite from paying interest to help people catch up a breath. Banks should find creative ways to help those struggling or in trouble to emerge healthy and proud rather than add weights on them to ensure they sink faster. When they sink, the banks will sink too. How foolish not to realize it is all one interrelated system!
Banks need to be profitable businesses, but they were so blinded by the Phantom of Riches that they chose to ignore the basic rules of conduct--including ethics and responsibility. Maximizing profits at all costs, without thinking what might happen as a result of the path taken, would best describe the banks' culpability. Though, what are banks? Bank are just people, irresponsible, shortsighted, white collar, casual-Friday, people.
It is time to regain that which we have lost lest it becomes too late and those invincible banks find themselves being shut down or run down--fallible just like us--their clients.
