Barclays bears brunt of consumer and government backlash

Business banking news review: week ending 6th Sept 2012

More bad news for Barclays: in the wake of the Libor price-fixing scandal that left such a bad taste the mouths of many, customers are prepared to leave in droves just as the government continues to investigate it for unrelated matters.

A recent admission by the personal and business bank account provider that the Serious Fraud Office is investigating the bank after some business with Qatar four years ago. Payments made in 2008 following an arrangement made between Qatar Holding and Barclays are being gone over with a fine-toothed comb. Run by the state-backed Qatar Investment Authority, Qatar Holding invests the country’s natural gas reserves-derived revenues – and they are quite considerable, which is bad news for a bank already reeling from the interbank loan price-fixing scandal that broke over the past few weeks.

Of course, Barclays has tried to pass the buck, attempting to shirk responsibility for the scurrilous actions the banking industry at large has been engaging in over the past few years. In fact, new Barclays chairman, Sir David Walker, said that it was actually the fault of everyone who’s ever taken out a free current account, arguing that without the revenues generated by fee-driven bank accounts, banks have to engage in immoral and even illegal actions to make up any shortfalls.

The argument that not charging for a free service enables criminal behaviour is a rather mind-boggling one, but there you have it, ladies and gents.

Of course, most British savers have had it up to their ears with the predatory practices of high street financial service institutions. In fact, another news story that broke this week saw a survey suggesting that savers are ready to abandon banks altogether and instead rely upon peer-to-peer lenders instead – especially since they offer much better interest rates!

The survey, which was undertaken by one of the largest peer-to-peer lenders currently operating in the UK, says that it’s grown by nearly double since the news broke about the Libor scandal this past June. Further research also discovered that around 70 per cent of UK savers would rather use their hard-earned cash to provide business loans directly to a business in need of working capital than relinquishing their cash to a high street lender that won’t even lend – and it doesn’t help that high street lenders offer rates of return so low that it’s nearly not worth it to give them your money for safe keeping!

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