With all this financial crisis being the main news (yes, news, not Russell Brand & Johnathan Ross furore. I really don’t care about it – and neither did everybody until the Heil on Sunday waltzed it’s Nazi loving butt in, but my thoughts are ably articulated by Doctorvee & Gia’s Blog). I was thinking today.
How do you start a bank?
I mean, we’re kind of in a situation now whereby nobody trusts the banks. They’ve been pissing everybody’s money (or rather, every other bank’s money) up the wall, and swanning around in Porsches & other large cars like those rich london types they truly are.
Anyway, a lot of people are a bit wary of banks now, and they are owned by rich fat cats who make money of other people’s misery, the time could be right for a new “local” bank, who could look after – say – savings (that way you wouldn’t have to invest in Visa/Mastercard, plus they wouldn’t need ATM’s), in a fairly simple, not overly complicated way. If say you are a millionaire (say, £5-£10million), you probably could offer loans to people at a fairly standard rate, and look after people’s savings fairly straightforwardly. What else would you need?
Of course, I’m not an economist, and fully expect to be shot down. It’s something I won’t do until I’m horrendously loaded, but what’s stopping – say – Simon Cowell, opening a bank?
Comments: 5 Comments
Rhys Wynne, the author of this blog, is a 20 something web designer from Colwyn Bay. 
How does this millionaire actually keep the money / savings etc. In a bigger bank? I think most banks have some in gold (not physically, but invested), in bonds, in the stock market etc etc. Not really possible for one person to manage a wide and varied portfolio of assets to actually have somewhere for the money to be.
At the moment, I think the bigger the bank the better – smaller banks are being swallowed up and its not making the news.
You may want to google Credit Union.
Oooh cheers
Saatchi and Saatchi tried to buy the Midland Bank in the 80′s with absolutely no banking experience what so ever, they just thought they could run it… and make loads of money. Midland wouldn’t let them though, so I’m guessing you would need to prove you’re pretty responsible.
not really… most banks have balances with each other (and- critically) with government owned/backed central banks.
The real problem is regulation, as anyone in the banking or insurance fields has to be monitored by the FSA in the UK. They have ridiculously long returns that you would have to complete on (I think) a quarterly basis and have all kinds of liquidity criteria to comply with. Although many “experts” reckon those criteria weren’t stringent enough in the first place.
The point is, you’d have so much work to do in terms of admin, you’d have to have a sizeable book of business to employ enough adequately skilled people to do it – and even Mr. Cowell’s assets might struggle to cover that
Besides, what if you could make more money through investing in a different type of business? Surely you’d do that instead…