Laughing All The Way At The Banks

Bank bosses are heading towards an obvious banana skin and are about to give it the full Charlie Chaplin.

Like Chaplin, they know it is coming and aren’t doing much to get out of the way.

Tomorrow sees various bank CEOs hauled before MPs to answer a range of questions, the key one of which will be: how come you don’t put up savings rates in line with mortgage rates?

The MPs questions will be based on the notion that banking should be fair. The bank CEOs, on best behaviour though they may be, think that’s rather quaint.

The bankers internal view, whatever the bosses say tomorrow, is that mortgage rates go up when they can get away with it, and then it is up to savers to chase the equivalent.

For as long as they can keep the gap between the two as wide as possible, that’s profits to them, dividends to investors and bonuses all around.

There’s something, sort of, reasonable about this. The banking sector is reasonably competitive – more for mortgages than savings, I’d say.

And no doubt it is lazy of so many of us to leave savings in accounts that pay nearly nothing, just because it’s a hassle to switch.

It seems fair to ask, five years after it was launched, whether the Open Banking revolution has failed.

By some measures, it’s a success. Five million of us have taken advantage to switch accounts for better deals.

Beyond that, it still feels like the main players are unaffected by real capitalistic pressures, that the big four (or five, or six) are so entrenched that there is little motivation for them to truly change, at least on savings.

So they’ll take the PR hit tomorrow and next week when they announce record profits.

And laugh, all the way to the bank…