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The Public Option in Banking – How We Can Beat Wall Street at Its Own Game

The Public Option in Banking – How We Can Beat Wall Street at Its Own Game

In Wall Street’s latest affront to the public trust, the nine mega-banks graced with $125 billion in taxpayer bailout money under the Troubled Asset Relief Program (TARP) were reported on July 30, 2009, to be paying out billions of dollars in bonuses to their executives. At least 4,793 bankers and traders received more than $1 million each in bonus payments, although it was one of Wall Street’s worst years on record. After months of investigating banker compensation, New York Attorney General Andrew Cuomo said, “The repeated explanation from bank executives that bonuses are tied to performance in a manner designed to promote (national economic) growth does not appear to be accurate.”

To say that it was an understatement would be an understatement. The bonuses paid to executives not only were not tied to national economic growth but were not even tied to some reasonable percentage of company profits. In fact they were generally greater than the net income of the banks. Morgan Stanley, for example, had $1.7 billion in earnings and paid $4.475 billion in bonuses. Goldman Sachs had $2.3 billion in earnings and paid $4.8 billion in bonuses. JP Morgan Chase had $5.6 billion in earnings and paid $8.69 billion in bonuses. JP Morgan’s largesse involved showering 1,626 of its favorite execs and traders with bonuses of $1 million or more. For most people, a “bonus” is a few hundred dollars at Christmastime. A million dollars is what you work a lifetime to try to save, and few people reach that goal. Even Citigroup and Merrill Lynch, which have been called zombie banks, paid $5.33 billion and $3.6 billion in bonuses, respectively — although they lost more than $27 billion each in earnings. The bar for merit is apparently so low that you’re entitled to a bonus if your zombie bank simply keeps breathing!

These blatantly inflated bonuses are just the last in a litany of abuses by those same profligate banks that nearly destroyed our economic system. If the derivatives on their books were “marked to market” (valued at what they would fetch on the market), the banks would be bankrupt, and their employees would be out of a job. Instead, they have been allowed to inflate the value of their “toxic” assets – and sell them to the U.S. government at the inflated value. Then they have taken the money they got from the government at these inflated prices and paid back the TARP money they received – allowing them to post inflated earnings and reward themselves with inflated bonuses! Many people feel that these bankers are thieves stealing from the public till who should be looking at jail time. But who is there to stop their parade of outrages? No one in Congress, the White House, or the news media is calling them on the carpet for it. As Senator Dick Durbin said recently, Wall Street owns Congress; and that is also true of the major media.

We may not be able to stop them, but we can join them. We the people need to play the bankers’ game ourselves. Even corporate giants such as General Motors and WalMart have now gotten into the banking game and are easing their credit problems by forming their own banks. The U.S. public sector is late to the party. States, counties, public universities could take the lucrative system the private banking industry has created for itself and turn it to productive use in the public interest.

KEEPING THE BANKS HONEST WITH SOME PUBLIC COMPETITION

In President Obama’s July 17 weekly address, he repeated his call for a public option in health care, in order to “increase competition and keep insurance companies honest” and to “put an end to the worst practices of the insurance industry.” The same call needs to be made for a public option in banking. In some countries, publicly-owned banks have operated alongside privately-owned banks for decades; and in those countries, the current crisis has served to show that public banks generally do a better job of serving the people and protecting their interests than their private counterparts.

In Canada, the trendsetter in public banking is the province of Alberta. Alberta’s publicly-owned banking system, called Alberta Treasury Branches or ATB, was initiated during the Great Depression to give the private banks a run for the public’s money. According to a government publication titled “These Are the Facts: An Authentic Record of Alberta’s Progress, 1935-1948”:

“The Treasury Branch system enables the people to pool their financial resources and to use these resources for their mutual benefit thereby enabling them to progressively free themselves from the stranglehold of the existing financial monopoly. These Treasury Branches provide effective competition for chartered banks thereby …

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3 Tips For Saving Money On Banking Fees

3 Tips For Saving Money On Banking Fees

People are often surprised by the charges they see on their banking statements. In truth, most – if not all – of the fees can be avoided with a little savvy planning. It’s worth remembering that banking institutions are motivated to maintain long-term relationships with their customers. While the fees represent a source of revenue for them, their priority is helping you and your family with your financial needs. That includes providing checking and savings accounts, investments, and a variety of loans. In that light, here are 3 smart tips for reducing your banking fees.

#1 – Stay Within Your ATM Network

When you use your debit card at an ATM, stay within your bank’s network. Otherwise, you may charged $1 or $2 for the transaction. Some financial institutions maintain large networks while others manage smaller ones. The size of the network is not as important as having an ATM near your home or work.

When you withdraw money, take out enough to last the entire week. That way, you won’t be forced to make an unplanned $20 withdrawal at a machine outside your bank’s network.

#2 – Consider A Free Checking Account

These days, it’s easier than ever to get a free checking account. Many banks offer them because they realize a lot of free checking account customers will need loans, investments, and other financial services down the road. If you’re paying a monthly charge for maintaining your checking account, ask your bank whether they offer a free alternative. In most cases, you’ll discover they do.

#3 – Balance Your Checking Account

If you don’t know how much money is in your account, it’s easy to bounce checks. In the old days, you needed to keep meticulous records because statements were mailed monthly. Today, you can log into your bank’s website and balance everything online. It only takes a few minutes and doing so will help you avoid bouncing checks.

Remember, each time you write a check without having enough money to cover it will carry a hefty charge (often, as much as $30). Keep track of your balance online and you won’t need to worry.

Saving Money On Banking Fees Is Easy

One of the reasons many banking customers are dinged with sporadic charges is because they fail to properly plan. For example, they might find themselves without cash while they’re out with their friends. A quick $20 withdrawal at an ATM outside their bank’s network might come with a $2 fee. Or, they may neglect to balance their money and bounce a few checks as a result. Each NSF (non-sufficient funds) event may carry a $30 charge. Use the 3 tips above to enjoy your bank’s services while reducing the charges you pay.…

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Living in Portugal: Banking in Portugal

Living in Portugal: Banking in Portugal

The Portuguese banking system was only slightly affected by the recent global financial crisis. The economic sector has changed significantly in the last years, with many Spanish banks opening branches in the country. Expats living in Portugal are recommended to open a bank account in order to be able to pay certain bills. All banks in this country are part of a national group of banks called Multibanko. If you are moving to Portugal from abroad or you travel regularly to this country, a bank account allows you to maintain full control over your finances.

Banking in Portugal is regulated by Banco de Portugak (Bank of Portugal). The most important commercial banks include Banco Efisa, Banco BPI, Caixa Central de Cr?�dito Agr?�cola M??tuo, Banco Internacional do Funchal (BANIF), Banco Popular Portugal, and Banco Comercial Portugu??s (BCP). Foreign banks include Deutsche Bank, BNP Paribas, Barclays, and ABN−AMRO. The euro (EUR) is the currency in circulation in this country.

The Multibanco system in Portugal allows customers a wide variety of conveniences. Account holders can use a Multibanco debit card in ATMs across the country, and for purchasing goods. They may also load time talk onto their mobile phone and pay utility bills online. If you just moved to Portugal and you have a Portuguese bank account, your utility bills will be paid directly from your account. There is no restriction on the amount of money flowing into and out of the country.

In order to open a bank account in Portugal, EU residents will need the following documents:

• An identity card or passport• Proof of residence• NIF number• Residency card

Applicants must be at least 18 years of age in order to open a bank account. You also have to go to the branch office nearest you. Even though you can open an account from abroad, it is frowned upon as the bank officials generally like to see applicants in person. Non-EU expats must provide proof of employment, tax card, proof of address in country of origin, and a passport. If you don’t know which bank to choose for your new account, do proper research and compare several banks before making a decision.

Opening a bank account in Portugal involves a lot of paperwork. Many expats have a difficult time providing all the documents required. Those who are self employed need proof of the business in Portugal. Minimum deposits to open accounts are usually around 250 euros. Account holders have access to a comprehensive range of banking services and products.…

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UK Banking in 2010 – An Era of Sensible and Conservative Banking?

UK Banking in 2010 – An Era of Sensible and Conservative Banking?

Perhaps unsurprisingly, the wake of the credit crunch has coincided with an increased awareness among the UK public as to how important it is to save rather than spend – and to become less dependent on credit and loans. This has been particularly evident among younger savers such as students learning from the mistakes of their parents, yet recent research from Abbey has found that families are still finding it difficult to save for a rainy day.

To stimulate the trend towards saving, the UK government have recently announced that three new banks will appear on the high street in an attempt to boost competition at a time of low interest rates, and to ultimately – according to Gordon Brown – ‘return to an era of sensible and conservative banking. So how is this era going to feel for the average saver?

In terms of new names in banking, it is likely that there will be few surprises. The recognisable Trustee Savings Bank (TSB) is set to become its own entity once more after being amalgamated with Lloyds Bank in 1995. Additionally, The Telegraph also tip that the publicly owned Northern Rock will be resuscitated too, while the perhaps less known Williams and Glyn’s Bank (formerly part of RBS) is also set to make a comeback.

The general opinion from financial spectators is that the emergence of three new banks will add to competition on the high street and be a benefit to the customer – especially in terms of savings rates and banking services. Of courses, to assume at this stage that the moves will be directly financially better for the customer is a little naïve – and although the attainability of mortgages across the UK is said to be getting easier a simple increase in the number of banks may not be sent o affect this in the short term.

However, as 2009 drawers to a close we will also see new regulations set to make the sector more customer orientated. Starting in October the FSA have imposed new rules which will mean that banks have to give at least two months notice if they intend to cut savings rates. This will give savers considerable forewarning in order to assess the rates elsewhere and ample time for them to switch should they wish to do so.…

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How to Secure Your Online Banking

How to Secure Your Online Banking

The essence of opting for internet banking is for it’s benefits and enjoyment. But do you know that not all that subscribe for online banking are really enjoying it? In spite of the fact that almost all banks are going online and the internet banking is spreading like wild fire. However if you adhere to these instructions the benefits of online banking will be all yours.

As fraudsters are in search of those who are careless about their accounts, make sure that all receipts about your account statement previously used are thorn to shreds before disposing them because any little trace to your account is risky. You must be aware of every transaction made on your account not necessarily your service provider should do the job because you need to guard your account strictly and ensure that check your account statement monthly.

Your personal interest must be paramount at any time therefore if you notice that your service provider is not impressing you do not hesitate to change it.

Remember to change your password from time to time to guard against spamming. There is available software that will help you in doing this, but most important have a very unique password. Avoid the use of office numbers, license numbers, phone numbers etc, to form your password.

You are aware that we have mentioned service providers above, (online banking) this is because they play a major role in online banking therefore be careful in making your choice because some of them are self centered and cares less about the customer. A quick-to-action customer service provider with good security measures is the best to opt for, so that speedy and careful response to any complaint will be easily attended to.

However, in spite of the fact that online banking requires adequate diligence, it remains the quicker and convenient way of banking from the comfort of your home office or even while on transit. So do not be frightened its benefits are quite immense.…

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Face Time: The Importance of Communication in Business

Face Time: The Importance of Communication in Business

Anyone in business will know the importance of good communication – after all, how can you provide a top quality service if you don’t know what your clients want? Tough times are ahead of us, and contractors working in IT contract jobs need to do all they can to gain honest feedback from their customers, in order to gain a better understanding of what their clients feel and what their employees think.

It is important to establish one or even multiple lines of communication between the contractor and the client. These can be in the form of emails, phone lines or paper tools – anything, so long as it provides candid, honest feedback with the option for anonymity. Never underestimate the value of anonymity. Surveys work well too, so long as they are carried out quickly and frequently and the results are publicised afterwards. This gives a clear message that you care about what the service you offer to your clients. Publish a weekly or monthly newsletter to let your customers know what is going on; this will allow you to publicise your successes whilst dealing with unhealthy rumours. The newsletter could even contain a Q&A section, answering any queries your clients may have regarding your services.

Show your face. Do your best to meet up with clients and customers regularly to discuss contract jobs; not only will this show the client that you are accessible and interested, but it will help to build and strengthen trust. If you want to honest feedback, you need to make an effort to expose yourself to clients and team members – organise a business lunch, or pop into client offices or locations – get involved!

It is difficult to take well to criticism, and the professional should never underestimate the value of staying level headed and professional. Negative feedback should be thought of as a learning curve – it is not necessarily a bad thing!

When faced with criticism, the IT professional should handle the situation professionally and tactfully. Resolve to investigate their complaint and take some time look to look into the issues they have raised. Ask questions about their criticism, and develop a polite and tactful dialogue to ensure that you learn as much as you can from their complaint. Be upfront about any mistakes that were made and admit any wrongdoings – this is a sure way to gain respect from your clients and your colleagues.…

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Why QE2 Failed: The Money All Went Offshore

Why QE2 Failed: The Money All Went Offshore

On June 30, QE2 ended with a whimper. The Fed’s second round of “quantitative easing” involved $600 billion created with a computer keystroke for the purchase of long-term government bonds. But the government never actually got the money, which went straight into the reserve accounts of banks, where it still sits today. Worse, it went into the reserve accounts of FOREIGN banks, on which the Federal Reserve is now paying 0.25% interest.

Before QE2 there was QE1, in which the Fed bought $1.25 trillion in mortgage-backed securities from the banks. This money too remains in bank reserve accounts collecting interest and dust. The Fed reports that the accumulated excess reserves of depository institutions now totals nearly $1.6 trillion.

Interestingly, $1.6 trillion is also the size of the federal deficit – a deficit so large that some members of Congress are threatening to force a default on the national debt if it isn’t corrected soon.

So here we have the anomalous situation of a $1.6 trillion hole in the federal budget, and $1.6 trillion created by the Fed that is now sitting idle in bank reserve accounts. If the intent of “quantitative easing” was to stimulate the economy, it might have worked better if the money earmarked for the purchase of Treasuries had been delivered directly to the Treasury. That was actually how it was done before 1935, when the law was changed to require private bond dealers to be cut into the deal.

The one thing QE2 did for the taxpayers was to reduce the interest tab on the federal debt. The long-term bonds the Fed bought on the open market are now effectively interest-free to the government, since the Fed rebates its profits to the Treasury after deducting its costs.

But QE2 has not helped the anemic local credit market, on which smaller businesses rely; and it is these businesses that are largely responsible for creating new jobs. In a June 30 article in the Wall Street Journal titled “Smaller Businesses Seeking Loans Still Come Up Empty,” Emily Maltby reported that business owners rank access to capital as the most important issue facing them today; and only 17% of smaller businesses said they were able to land needed bank financing.

How QE2 Wound Up in Foreign Banks

Before the Banking Act of 1935, the government was able to borrow directly from its own central bank. Other countries followed that policy as well, including Canada, Australia, and New Zealand; and they prospered as a result. After 1935, however, if the U.S. central bank wanted to buy government securities, it had to purchase them from private banks on the “open market.” Former Fed Chairman Marinner Eccles wrote in support of an act to remove that requirement that it was intended to keep politicians from spending too much. But all the law succeeded in doing was to give the bond-dealer banks a cut as middlemen.

Worse, it caused the Fed to lose control of where the money went. Rather than buying more bonds from the Treasury, the banks that got the cash could just sit on it or use it for their own purposes; and that is apparently what is happening today.

In carrying out its QE2 purchases, the Fed had to follow standard operating procedure for “open market operations”: it took secret bids from the 20 “primary dealers” authorized to sell securities to the Fed and accepted the best offers. The problem was that 12 of these dealers – or over half — are U.S.-based branches of foreign banks (including BNP Paribas, Barclays, Credit Suisse, Deutsche Bank, HSBC, UBS and others); and they evidently won the bids.

The fact that foreign banks got the money was established in a June 12 post on Zero Hedge by Tyler Durden (a pseudonym), who compared two charts: the total cash holdings of foreign-related banks in the U.S., using weekly Federal Reserve data; and the total reserve balances held at Federal Reserve banks, from the Fed’s statement ending the week of June 1. The charts showed that after November 3, 2010, when QE2 operations began, total bank reserves increased by $610 billion. Foreign bank cash reserves increased in lock step, by $630 billion — or more than the entire QE2.

In a June 27 blog, John Mason, Professor of Finance at Penn State University and a former senior economist at the Federal Reserve, wrote:

In essence, it appears as if much of the monetary stimulus generated by the Federal Reserve System went into the Eurodollar market. This is all part of the “Carry Trade” as foreign branches of an American bank could borrow dollars from the “home” bank creating a Eurodollar assets at the smaller [U.S.] banks remained relatively flat…. Thus, the reserves the Fed was pumping …

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Offshore Banking in Gibraltar

Offshore Banking in Gibraltar

Gibraltar is small in size but big on tax savings. The country of Gibraltar covers just 2.642 sq. miles of land, an area roughly half the size of Rhode Island. For a small country it is a dynamic financial center for investors world-wide.

This self-governing British territory located near the entrance of the Mediterranean, overlooks the Straites of Gibraltar, on the southern end of the Iberian Peninsula and Europe. It shares it’s northern border with Spain.

Gibraltar has close historical ties to Britain’s military and is the home of one of England’s Royal Naval bases. The country has an economy supported by shipping and offshore banking, with tourism adding even more to its coffers via the estimated 7 million tourist who make it their destination each year. These 3 industries added an estimated 25%-30% each to Gibraltar’s GDP. Support from the British military alone adds another 7% to the total economy.

The population of Gibraltar is estimated at over 28,000 people, with a per capita GDP of $38,200 (2005 est.), with a large number of them employed in the service and industrial sectors. The official currency of Gibraltar is the Gibraltar Pound (GI, GIB). The Gibraltar Pound is divided into 100 pence.

The wealth management and private banking sector of Gibraltar has attracted many big name players like Barclays, ABN Amro, and IDT Financial. Due to the high regulation and low taxation this country offers, it is one of the more ideal offshore banking locations and offers attractive tax conditions to those investing in it. Asset management is primarily what the offshore sector focuses on for individuals who are of a high net worth. There is no taxation on wealth, inheritances and gifts, and becoming a resident of Gibraltar requires no physical presence, so it might be wise to consider not only offshore investing in Gibraltar, but living there as well.

Quite often the banks here will cater to the rich and those of a higher net worth. They will offer special rates, and feature their private banking services in the lime light. “Customer Relationship Management” is a specialty of many of the offshore banks in Gibraltar. However, some care needs to be taken when approaching the private banking sector here, as well as in many other countries. Keep in mind to do your due diligence and look at how the bank is structured. Many are simply front ends for investment funds, which may be fine, or it may not. If a bank is offering personal attention, bear in mind exactly why it is doing this and what it hopes to gain from you depositing your money.…

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How to Avoid Online Banking Problems

How to Avoid Online Banking Problems

Many people think that using Internet bank services is a risky thing to do. There have been so many internet scams and frauds that people think that the internet is the most dangerous place to handle your money. But is this really true? Is your money going to be stolen from your internet bank account? Well, not if you make the right choices and use a little common sense.

Bank internet services are extremely safe, allowing you to make, alter and cancel transactions whenever you need to do so. The benefits completely outweigh the disadvantages of internet banking services. You are able to bank at anytime of the day, at anyplace on the globe, provided you have internet in that place. It will save your time and will surely make your work a lot less.

The amount of people who use bank internet services has grown quite a bit in the last year. This is because people are now realizing how advantageous online banking is and how safe it is.

Here are a few tips to help you have a safe banking experience:

1) The most important thing you need to know while using bank internet services is NEVER to give your online bank username and ID to anyone. You may think that giving these details to the bank may be alright, but its not.

2) You may at times receive an email that has a link to your banks website. This website that you are directed to is actually a fake website that is designed to look exactly like your banks website. Many people click these emails and login on the page they are directed to. NEVER do this. Always type in the URL yourself. These emails are known as phishing emails.

3) Only use your personal computer to use bank internet services. Using a shared computer or one at an internet caf?� must never be done.

4) Remember to clear the history, cookies and cache after using your online bank. Also remember to never save your password and username or ask the computer to remember it. It is better that you have the username and password stored in your head rather than writing it somewhere.

5) Another very important thing you must do, which a lot of people forget to do, is LOG OUT. If you do not log out, all the other precautions you’re taking will be of no use.

These tips will help you to have a smoother Online Banking experience. You will have to trouble at all if you follow these simple tips. Bank internet services themselves are very safe and you will have nothing to worry about. You will find that using these services will make life a lot easier thanks to all the features they have to offer.…

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Halifax Internet Banking – Bringing Revolution in Banking

Halifax Internet Banking – Bringing Revolution in Banking

Halifax is an insurance and finance company in the United Kingdom. It is an extension of Lloyds banking group. Halifax is considered to be the UK’s biggest provider of saving accounts and residential mortgages. But, keeping these aside, no one likes to stand in the bank queue for long hours. In fact, nobody has the time to do so. In order to make things easier, Halifax has started its own internet banking. Halifax internet banking has enabled its customers to make most of their transactions online, by logging on to its official website.

Through internet banking, Halifax has brought all the accounts of its customers to a single portfolio. It can include share dealing and credit cards also, if those services are chosen. There is an attractive as well as innovative service known as the websaver which is exclusively available in Halifax internet banking, which draws a high interest rate while allowing the customers to monitor their accounts. It is useful for saving money for the future. The user has access to mortgage calculator to find the right option. Another feature in this type of banking is that the customers can see a large number of transaction statements. It gives the freedom to transfer money to any bank in the UK which includes paying bills also. It is possible to schedule the transactions to any date. Another feature provided is, the holiday money service in which the customers can order currency of any country online. It also provides travel insurance. These benefits have helped its customers from getting away from the tedious form-filling procedure. But there are some loop holes also. There is a limit to viewing transactions and it has no option for downloading data. The website is fully protected from hacking and frauds and there is no financial risk in using the services. While logging into the online account, the user is asked for three types of information. The first two are the username and password. The third information changes from time to time. For example, the user may be asked to enter his birth date or birthplace. There is a help button in the website, where the user can clear any query.

The Halifax internet banking has indeed proved to be an easy way for money transactions, getting loans, etc. In today’s world, the internet has reached even the inaccessible regions thereby making online banking a boon for the banking sector for the mundane.…