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Bank of Dave

#1
Did anybody watch this the other night?

Been sniffing around for threads on ARRSE but couldn't see anything.

Bank of Dave - Channel 4

Essentially, a wealthy-ish business owner from the Burnley area called Dave Fishwick goes about setting up his own small bank down on the high street, lending at only 5% interest and making it a small, customer-driven little thing. First episode had him trying to set it up, where the SFA refused to meet with him and wouldn't allow him to actually call it a bank (punishable by law, apparently!) unless he stuck millions in a secure account with them. A lot of the technicalities went over my head but it was an interesting wee program.

Read a piece on him in the paper today where he's discussing the idea of this becoming a nation-wide thing, small independent banks with low rates that aren't about making a huge profit, they're just looking to provide a good service.

Anybody see it?
 
#2
I thought that the eventual goal was to set up a credit union. Mandelson's idea aboutthe Post Office becoming the People's Bank was one of his few good ones. Needless to say, it was quietly kicked into the long grass with the regime change in Downing Street.
 
#3
I thought that the eventual goal was to set up a credit union. Mandelson's idea aboutthe Post Office becoming the People's Bank was one of his few good ones. Needless to say, it was quietly kicked into the long grass with the regime change in Downing Street.
All they would do was allow him to function as a credit union but he wasn't having it.
 
#5
But for low income groups with poor credit scores, credit unions are ideal. It would stop them falling victim to payday loan companies and the like.
 
#6
Yes I watched it the other evening. Seemed like his idea was akin to a credit union but he wanted to call it a bank for some reason, wasn`t even happy with the building society idea. With the rules being what they are, it`ll be interesting to see what happens next.
 
#8
I can't remember exactly why he wasn't up for just running a credit union, I think it may have been something to do with ownership. As far as he was concerned, he didn't see why he couldn't be a bank, which I could sort of understand at the time. Do credit unions allows you to save your money with them?
 
#9
Yes I think the savings limit is 10k for a credit union, once you`ve reached that that you have to move it to a bank or building society.
 
#12
Seemed to be a waste of time, I worked for finance comapny that wanted to operate as a bank, to do that they needed a licence and the onyl banking licences available cost millions. Bank of Dave ? Bank of BBC look how in touch with the common man we are more like (not very)
 
#13
Seemed to be a waste of time, I worked for finance comapny that wanted to operate as a bank, to do that they needed a licence and the onyl banking licences available cost millions. Bank of Dave ? Bank of BBC look how in touch with the common man we are more like (not very)
Its on Channel 4 Polar - do keep up, there's a good chap!
 
#14
Thought you were on about this Funding for Lending scheme: the verdict - FT.com, which promises to be as effective as Project Merlin, given that the banks are involved.

I particularly like this bit: "The scheme will start next month and will run for 18 months, but banks will be able to borrow for up to four years at a rate significantly lower than is available in the wholesale markets." ,which effectively means that the taxpayer wil be underpinning another revenue stream for the banks, who are under no obligation to charge proportionately low rates to SMEs.

Dave would have been better off cutting out the banks and setting up a mechanism whereby the cash was available to SMEs at 0.25%, without the banks getting involved. Given that this is no longer a free market mechanism, it would have been far more effective in getting that cash into the economy to stimulate growth. The only drawback would have been that the banks would not have been able to bolster profits and Balance Sheets again at the expense of the taxpayer.
 
#15
Bank of Dave was a brilliantly funny programme, and a very pointed poke at the near monopoly position of a few big banks whose bosses pay themselves billions of your money in bonuses.

Maybe this country does need a network of small local banks, in tune with small local businesses, and not trying to sell everyone insurance etc etc. Some small banks would fail - but if one did it wouldn't be a catastrophe - a small insurance scheme would allow the government to guarantee depositors money. It could be a move away from big banks too big to fail that then have to be bailed out by us taxpayers when they get there sums wrong on hedge funds (aka spread betting).

Whatever happens to his bank, I'll bet this won't be the last we hear of Dave Fishwick - as a character he's just too "good TV" to disappear.
 
#17
In answer to the questions of why couldn't he open a bank (or credit union) and call it bank, the answers are simple.

The minimum capital requirement for a bank is EUR 5,000,000. (It's the same for insurance companies). This can be held as a mixture of cash, government bonds, property, etc. Getting a banking license is very simple: get together the cash, a sound business plan, decent (qualified people) and present everything to your FSA. Only tricky parts tend to be getting together the minimum capital, decent qualified people who will pass FSA inspection and get their approval and a business plan which again satisfies the wonks at the FSA. Easy.

Why do they do this? Well, for some unknown reasons (yes, I am being sarcastic), the Governments of the UK for several hundred years have felt it best for the public if banks are not run by charlatans, billy bullshitters and other fly-by-nights. Obviously the previous administration had a different opinion and everyone is still picking up the pieces.

Even if the 'bank' is set up with the best of intentions, it will be attacked (in the business sense) by other banks competing for business, as well as fraudsters, etc. The strict requirements are there to protect the bank from its own stupidity. Why should the FSA do this? Confidence in the banking system is key to a sustainable economy that attracts investment. Without investment our economy dies. If a bank dies, then confidence in the other banks is shaken. Not good. If a bank dies, then the ramifications go far beyond the shareholders losing out.

For example: Company A banks at 'NewSmallBank', and trades with Company B who banks at HSBC. Company B orders 2 million widgets from Company A, paid in advance, for a special Chinese project. Sadly, before Company A can use the money to pay it's own suppliers for the good they have already delivered, 'NewSmallBank' collapses with massive losses and a large tax bill. The majority of the cash left in the bank goes to the taxman (who always has first call and gets 100% of amount owed if there is the money available), a little bit goes to the lenders and even less to the account holders.

As a result Company A is sued by all its creditors and goes bankrupt with the loss of 400 jobs. 5 suppliers of company A also go to the wall and a further 200 jobs are lost. Company B can just survive the loss of the money, but is then sued by their Chinese partner for defaulting on their contract. They are forced into liquidation with the loss of a further 800 jobs.

In order to stop the above happening, the UK had, until recently forced banks to behave as serious institutions. As a result the UK hadn't had a bank run for almost 100 years (no bank closed in the Great Depression), until Gordon Brown allowed Northern Rock et al to happen.
 
#18
Agreed, amusing chap, started out hod carrying then found a niche in vehicle sales, looks a **** in that Ferrari though but then who doesn't?
He used it to his advantage, though - getting petitions etc. "Yeah, you can sit in the car if you sign this."

I really believed it was a full-on **** you to the banking industry, the kind of thing that seems rare these days. Although I understand what Dread is saying about the safety of large, financially capable institutions (the reason why the FSA won't speak to Dave in the program), I really believe that these institutions are so large and self-serving that they honestly don't have a clue regarding their 'customers' anymore.
 
#19
Maybe this country does need a network of small local banks, in tune with small local businesses, and not trying to sell everyone insurance etc etc. Some small banks would fail - but if one did it wouldn't be a catastrophe - a small insurance scheme would allow the government to guarantee depositors money. It could be a move away from big banks too big to fail that then have to be bailed out by us taxpayers when they get there sums wrong on hedge funds (aka spread betting).
This is exactly what Peter Mandelson proposed with the Post Office becoming the 'People's Bank' i.e. the logical extension of basic bank accounts.
 

udipur

LE
Book Reviewer
#20
He's applied for a banking licence but we've only issued one in 140 years - to the Metro Bank - and that was with a capital plug of 50m.

He's not allowed to use the word 'bank' or 'deposit' but if he's paying out 5% and lending at 8%, it's not a bad return. When I first saw a report on this he was shifting about 25k a month so not yet clover money.
 

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