Bank sell off: Return for tax payers vs greater competition

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The House of Commons Treasury Select Committee inquiry into competition and choice in the banking sector met today and ahead of the meeting in a Letter to Treasury Select Committee (link opens in .pdf), eBay called for greater banking competition to be the top priority for bank sell-offs.

Several banks led by Northern Rock had to go cap in hand for tax payer bail outs and Mark Hogan insisted that the planned sale of government stakes in bailed out banks must reach a balance between promoting competition and getting a good price.

Clare Gilmartin, eBay Vice President, called on the Government to take action to help the one third of SMEs who eBay say are currently being denied access to finance. She requested that the promotion of greater competition in the banking sector should be the Government’s primary objective when drawing up proposals for the sale of public shareholdings in Britain’s banks.

eBay’s research suggests that three-fifths of small businesses blame the banks for the continuing problems in accessing finance and half believe that greater competition in the banking sector should be a higher priority than maximising taxpayer returns from the privatisation of the banks.

Mark Hoban told parliament’s Treasury Select Committee he was keen to boost competition in the UK banking industry but that there would be a trade off between promoting competition and getting a good price.

What would be your priority – do you think the government should achieve the highest possible return on tax payers investment in the banks, or do you think a lower price but fostering more competition would serve the country better in the long term?

19 Responses

  1. hypocrisy!

    ebay could do more than any select commitee to help smaller business by being more responsive to their concerns and problems

  2. Is there no area into which ebay won’t poke its corporate nose!

    What on earth has ebay to do with SMEs and our banking arrangements? The idea that ebay has the vaguest understanding of what SMES want or need is laughable. Do they think we all love compulsory Paypal!

  3. The more I think about this, the funnier it is.

    Ebay, the champion of the little man! (Don’t mention the Outlets, or Adcommerce. I mentioned them once, but I think I got away with it).

  4. Lets hope lazy journalists don’t simply latch on to the ebay line, as if they (ebay) are some kind of union working on our behalf.

  5. Can we get the banks to write a letter asking for more competition in the auction site market?

  6. I cannot see any logic at all in eBay being involved with this. If anything it could backfire on eBay as the banks may point to the Paypal monopoly and suggest the regulater needs to look at this!

    eBay should have kept their tin helmets on and kept their heads firmly under the fence. Somebody high up in eBay may well be gently removed from their position on the back of this!

  7. Bain, McKinsey alumni modus operandi. Grease a few palms, big biz + pols = corporatocracy. That’s they way they were trained, manipulate for their own ends, what customers/voters want of no consequence.

  8. Years ago Banks were a relatively friendly place. There were clerks who often had smiles on their faces and even if you had to visit the Bank Manager he often had a smile on his face and was willing to sit and talk over your business or even your overdraft. Compare that with today. The Bank Manager is almost extinct to be replaced by Salesmen(and women) only interested in selling you yet another “product” or “service” often it does not matter if you need it or not you have to buy it. 5p overdrawn and they bring in the heavy mob. Charges appear on your Bank Statement almost like confetti. So here’s hoping that the Government can use its influence to set up an New Bank Independant of the current lot. A New Bank actually interested in its customers and not just seeing them as a big £ sign. A New Bank with branches in every town(or working towards that ambition). A New Bank that has Bank Managers who are willing to sit down with the small and medium sized Business Man and talk over his requirements and come up with reasonable answers. A New Bank where when you go in to cash a cheque you don’s have to fight off salesmen trying to sell you all sorts of “products” and “services”. Before anybody comments I can dream can’t I???

  9. Banking up to the big crash of the late 80’s was run my your branch manager.

    He was the one who knew his customers (virtually, all who spoke Engish).

    The problem became as it is today, was that, back then, If you had Money, you told the Manager & he (with a nod & wink) accepted what you said & lent accordingly.

    The trouble that followed was when Property started to crash most of the ‘other’ assets were NOT with the bank & they lost out big time.

    I can remember in 1990/1 Barclays LOST £100k in a year…..Shock, horror by todays figures….

    But then we all had cash in our pocket too.

  10. Thinking about Bank Managers. Many years ago in a town I once lived in there was a bloke and his father. They drank in my local and were probably the two scruffiest blokes you could hope to meet and they sat together in the corner and got steadily drunk together every night. The younger one had this habit of disappearing for a week or two at a time and there were rumours that he worked with one of the big Pop Groups of the time and when he got home it was straight down the pub and back into the old routine. Anyway this one time he got home and went down the local Bank and asked to open a Bank Account. Anyway the Clerk looked him up and down and very slowly and with very little interest got out the forms. They filled in the forms and they got the bit about how much did you want to deposit in the account? Well my friend started to go through his pockets and finally found a bit of dirty screwed up paper. He flattened it out and handed it to the Clerk. It was a cheque for £20,000(so the story I heard had it and remember this was in the days when a £ actually bought a round of drinks rather than today not even buying a half pint of something pretty foul). The Clerk took one look at the cheque and shot into the Managers Office. The Manager came out and invited my scruffy friend into the Office and even got the Sherry out.


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