Over the past year, many people have been increasingly upset over large bonuses paid to the executives at large banks. As the banks decline in profitability, they have continued to pay large bonuses to the executives leading the company. However, those banks appear to have finally started cutting back on the bonuses they’ve been paying out.

Last week, Fred Goodwin was stripped of his knighthood over bonuses were offered to executives after his company posted a significant loss. Ultimately, the Royal Bank of Scotland needed the largest bailout in the history of the United Kingdom.

The Network Rail was another major institution that intended to offer large bonuses to their executives, but has since retracted them. Earlier this week, the Network Rail announced they would be retracting £20 million in executive bonuses. According to the terms of the executive compensation package, the executives are eligible to receive up to 60 percent of their annual salaries each year in bonuses.

However, although the executives were eligible for these bonuses, no bonus is guaranteed or was agreed upon. The Network Rail has found more useful means of using the funds available. The company said that it intends to spend more money on safety programs.

The executives will not receive any bonuses this year. In subsequent years, they will be forced to negotiate a new package.

As political pressure increases, the executives are likely to receive a significantly lower compensation in the coming years. Justine Greening, transport secretary, said that she will be attending Network Rail’s meeting this coming Friday. Greening hopes she will be able to influence the bonus package they will be offering in the future and hopes to discourage them from issuing any bonuses anytime in the near future.

The government said that the company is facing additional regulatory issues. Two months ago, they were also sent a notice from the Department of Rail and Transit, which reprimanded them for failing to arrive at their scheduled locations in a timely manner.

As the government, shareholders and general public become more irate over the future of executive bonuses in the country, stricter policies over executive bonuses are becoming increasingly likely. These bonuses will likely become far less generous in the coming months and executives will likely be forced to work harder to earn them.

You know the saying, put your money into bricks and mortar and you’ll see a long term return, but it seems one Irish artist has taken that advice literally. As an artistic statement about the bankrupt Irish economy, Artist Frank Buckley has built a house made from over 1 billion euros of shredded decommissioned notes.

Frank Buckley's Billion euro house is made entirely from €50,000 bricks of shredded decommissioned notes

The billion Euro house sits in the lobby of the Glass House in Dublin, an empty office building in the city centre. The money, which comes in pulped bricks of shredded decommissioned notes, was loaned to the artist by the Mint.

The idea came to Mr Buckley while he was waiting for a friend outside the building and the owners of the Office block were immediately keen on the idea. He had been given a block of the shredded notes to use as confetti at his wedding, which acted as inspiration. The unemployed artist simply asked the Mint for a lorry load more and while there was almost as much paperwork involved; the Mint were more than happy to assist.

While fears of a renewed banking crisis haven’t caused as many concerns as originally predicted, they have undoubtedly caused some frustrations for a number of customers. Although the bank rates have remained constant over the past three years, banking concerns have caused mortgage rates to increase over time.

According to Kara Gammell of The Telegraph, the Eurozone crisis has caused a loss of faith in the European banking system. As the perceived risk of the EU banking system becomes a greater concern, they are likely to have a number of additional worries. One of the biggest problems is the raising interest rates and exchanges rates.

According to technical manager of Charcol, Ray Boulger, the banking crisis in the EU is increasing the marginal costs for lenders. In turn, those fees must be passed on to mortgage customers.

As a result, customers who are looking for a mortgage without being willing to put down at least a 10% deposit are likely to pay much larger mortgage rates. Although there are signs that the market for first-time buyers is improving, the increasing bank fees are a major concern for home buyers. Boulger encourages families to seriously consider increasing their deposit in order to be eligible for lower rates.

Customers may also have to take advantage of other new deals. For example, they may want to consider looking at fixed rate, five-year deals. These deals may help insure them against threats from rising rates as the Eurozone crisis becomes a greater concern.

Consumers should be concerned over the recent debt downgrades in the Eurozone. The S&P downgrades have raised worries that the Eurozone crisis continues to escalate and exchange rates are likely to increase. In turn, this is likely to increase the mortgage rates of banks throughout the UK as well. UK banks are already facing a number of challenges as they struggle to maintain their profits.

Concerned banks have decided to increase the banking fees issued to many of their customers. It is also conceivable that other rates may need to increase in future months as well.

Although new home buyers aren’t likely to be overly optimistic by this news, they are going to find they can still reduce their mortgage rates by taking some of the steps Boulger has proposed.

Billionaire Richard Branson took over Northern Rock plc earlier this month. Following the takeover, Branson’s holding company Virgin Money will be responsible for the 75 branches and 21,000 staff that currently work for Northern Rock.

Many investors have praised the takeover, arguing that it was the only hope that the bank had to avoid a complete banking collapse. However, customers of Northern Rock were not as optimistic about the deal.

Branson announced that he intended to impose an annual £60 fee on all existing bank accounts. This approach is likely to create a lot of controversy and be met with hostility by existing bank customers.

Therefore, Branson has decided that it would be unwise to proceed with only offering fee charging accounts and decided to take a different approach. Instead of charging fees on all accounts, Branson intends to offer customers the choice between opting for free accounts or accounts that charge fees in exchange for incentives. Incentives include opportunities to earn discounts gym membership or trips through Virgin Flights.

Although the new proposal is being met with less criticism, many consumer groups are still skeptical of Branson’s new solution. These groups argue that these deals tend to be of low value and are likely not worth as much as the customers would be paying each month. Nonetheless, it is encouraging for many people to see that Branson is at least working on a new system that would help eliminate mandatory fees for Northern Rock customers.

Eddy Weatherill, of the Independent Banking Advisory Service states that customers are becoming increasingly concerned over the fees being implemented by banks throughout the UK. Weatherill even went so far as to say that no one trusts banks anymore and that bankers are going to need to implement much more equitable programs if they intend to regain that trust.

Many consumer advocacy groups praised reporters who brought the situation to their attention and put pressure on Virgin Money to withdraw the fees. They were afraid that if they failed to get Branson to back off of the fees, other bankers would revoke free accounts as well.

The new announcement directly contrasted statements made by Virgin Money at the beginning of the year. Branson’s employees argued that the fees were fairer and more transparent than those issued by a number of other banks, which were often issued with more secrecy.
Read more: http://www.dailymail.co.uk/news/article-2084996/Richard-Branson-backtracks-60-bank-fees-Northern-Rock-takeover.html#ixzz1jf2O9dn2

The latest UK figures for unemployment show the highest number of people without a job since 1994, with 2.68 million out of work. The figures, released by the Office for National Statistics (ONS) revealed some discouraging statistics including:

- 29.7% of youths aged 16 – 24 unemployed

- 8.4% of the economically active population unemployed

- 0.3% rise in umemployment on the previous quarter, a rise of 118,000.

- There were 2.68 million unemployed people

- Highest number of unemployed people since 1994

If you’re employed in the private sector you may be surprised to read that both regular pay and bonuses rose by 1.9% on the same period last year. Of course this is cold comfort for many who face the threat of redundancy and not much good to public sector workers but it does show some positive movement.

Any early signs of a smile emerging may be wiped off your boat race by the predictions of leading analysts, declaring that the UK has already slipped back into recession. On the plus side, it’s the Olympics this year and what better than a national showcase to bind the multi-cultural societies of our great nation (if you’re not proud about your country, it couldn’t help).

Banks throughout the UK and other regions in Europe continue to face substantial losses. As they attempt to get their finances back under control, many people believe that they are going to be charging higher fees. They will likely face added pressure as new regulatory pressures.

Consultants from Pricewaterhousecooopers said that there is almost no way that banks would not begin creating new fees. However, they also said that the practice may not have to continue indefinitely. Another trend may counteract the increase in bank charges. As competition increases in the banking industry, banks are probably going to have to limit the fees they charge.

Pricewaterhousecooopers is not the only analyst to suggest such a trend. Another report was issued by the Confederation of British Industry. That report suggested that there was a significant fallout from the banking crisis in the Eurozone. As the debt crisis continues to infect the UK banking system, the local banks will need to find new ways to address it. The CBI report corroborates the findings of Pricewaterhousecoopers, further arguing that the banking crisis is going to get significantly worse. The only way they believe the banks can shelter themselves from the fallout in the Eurozone is to charge higher fees to their customers.

Over the most recent quarter, the banks posted much higher earnings. Nonetheless, austerity measures and the EU debt crisis are going to have a significant effect on the future of the banking system. Analysts have no way of predicting when there will be another major fallout and whether or not the banks will need to take more drastic action.

Regardless of how they intend on handling the crisis in the Eurozone, the banks are probably going to feel the need to charge more money as they try to increase their financial position. A number of different banks are still implementing a number of bank fees and even some of the newer banks are getting ready to start setting up programs that are going to charge their customers.

While Barclays and Santander continue to charge a number of fees to their customers, newer companies such as Virgin Money are also charging their customers for a number of the privileges they have instituted.

UK customers are still looking for alternative solutions. Many may consider transferring their accounts to credit unions the same way American customers did when they got frustrated with the fees they were being charged by Bank of America. However, these transitions are unlikely to happen overnight and they will probably be forced to contend with a number of high fees for the time being.

It’s hard to believe that it’s already been three years since the meltdown of our economy and the subsequent bank bail out. Yet today, well over 1000 days later, we still find ourselves in the midst of a crisis that threatens to bankrupt a handful of European countries and dramatically change our economic structure for the foreseeable future.

Japanese consumers took it slow in the 90's, as their economy saw little growth

While the bail out sured up the banking sector and gave investors confidence, it did little to increase consumer confidence or reduce future unemployment rates. But it must be said that we’re not at risk of collapse, we may face a 90′s Japan-esque decade of very low growth, but it’s still growth and there’s very little chance of things going the way of Greece or Italy.

The problem, that’s been well highlighted, is our economy’s dependence on the banking sector instead of more reliable (but less glamorous) industries such as manufacturing and exporting physical goods. The Office of National Statistics (ONS) ‘Blue Book’ reports that the financial sector accounted for 31.9% of Gross Value Added (GVA) to the British economy, yet in size it only makes up 5.1% of it.

The Banking sector is small in size but unmatched in economic contribution

The result is a financial sector that employs few people and produces nothing that can be bought by other countries but contributes massive tax receipts. The major problem is that, unlike Germany who’s Mittelstand makes niche items of a high quality that will always be in demand somewhere in the world, our banking sector can collapse simply due to a lack of confidence.

But, that’s our bed so to speak and unless we have a radical rethink on the structure of our economy; we’ll be sleeping in it for a while yet. So, with the banking sector (and our economy) still in need of protection, David Cameron made a decision on Friday to go against a new EU proposal to place bank charges on financial transactions that could see financial institutions upsticks and leave the City.

Cameron veto'd the FTT in Brussels on Friday

The new Financial Transaction Tax (FTT) would be a tax on every purchase or sale of stocks or bonds or whatever financial product by a bank. Like any tax, if we all pay then it’s fair, but the problem is 75% of the total tax paid through FTT would be paid by banks located in the UK. This would leave banks with no real incentive to base themselves in the City of London and could see them leave, taking huge tax payments with them and damaging our economy.

That’s why Cameron veto’d it, but he’s going to have to explain himself to his right, sorry, left-hand man, Nick Clegg and other MP’s later today, many of whom fundamentally disagree with the veto, fearing it may distance us from Europe. Such an outcome could mean difficulties with trade, relations and important economic ties, which could also spell disaster as Europe is by far our largest trading partner.

Clegg and Cameron don't see eye-to-eye over the EU veto

So, going with the FTT or against it has implications but whether we support it or not the EU can vote in favour of the new charges and force them upon us. It’s difficult to know what will happen with FTT but the bigger question is what will happen to the Euro Zone and the EU as a whole. The fallout from FTT may well shape a new EU and the inability to save Greece, Italy and even Spain could see them leave the single currency, as could their unwillingness to continue with austerity cuts and tax hikes.

While these outcomes are unknown, one thing is for sure – the next five years will see a major shake up of the European Union and the Euro Zone and anyone who tells you they know exactly what’s going to happen is either back from the future or a fool.

Banks have been charging significant bank fees for several years. Although there have been a number of ways customers can fight to get their money back, these fees have been largely accepted as a fact of life. However, there may be some light at the end of the tunnel yet.

Customers were starting to believe that bank fees couldn’t possibly get any better. They peaked at 25 pounds for a single overdraft. Just when things seemed like they couldn’t get any better, the decision of a long-standing legal battle was finally made.

Customers took these banks to court, arguing that the banks resorted to unfair trading practices. The Office of Fair Trade took an interest in the number of customers that were making these allegations. The Office of Fair Trade decided to issue a legal settlement against the banks, forcing them to change their policies on overdraft protections.

The courts sided with the OFT. Unfortunately, the victory was short-lived. The banks appealed the decision, and high courts ruled that the OFT did not have legal grounds to assess these cases. The lower court’s decision was thrown out and the OFT and disgruntled customers were back to square one.

Financial Secretary to the Treasury, Mark Hoban wants to look out for the interests of consumers. He said that customers came to the watchdog agencies, insisting that the charges were unfair. They felt the banks often left their terms ambiguous and demanded clearer terms.

Ministers are willing to stand by voluntary measures to change the practices. The other solution requires changing the law itself, which the banks would fight and any decision would be appealed. Although this seems to be the path of least resistance, many people criticize the government’s attitude towards the situation. Critics insist that relying on banks to make voluntary changes to their policies on overdraft fees will create the change they are looking for.

Bank charges have actually dropped significantly in the past few months, when they topped 40 pounds for a single overdrawn transaction. Although this shows some improvement, customers feel their is still a long ways to go. Interest rates are now nearly one third of the principal on overdraft balances. As a result, the public’s confidence in banks is seriously dwindling.

Fortunately, arrangements are being coordinated with the British Bankers Association to improve the system. Customers are being given more control over their accounts and should be able to substantially reduce their balances in the near future.

Customers in the UK are ditching high street banks in favour of opening accounts with Metro Bank. The first start-up bank to open in Britain in a century is opening hundreds of accounts a day with people desperately looking for a trustworthy bank that cares about customer service. The London based bank has pledged to provide customers with good customer service and low rates. The bank is set to open a nationwide online account that will not charge customers for taking out cash making it one of the only banks in the UK that offers this.

The Croyden store, the latest to be opened, attracted 500 new accounts in its first weekend. Bank Chairman Anthony Thomson has said “‘It’s incredible; we always said there was a real opportunity for a bank offering a real customer experience. People said it wasn’t possible, that all customers cared about was rates, but we’ve been proved right.’

When the Bank launched it was criticised by some in the banking industry as offering below par rates and focusing too heavily on customer service. However Thomson says their rates are fair, transparent and without catches, something that is rare with the high street banks. Metro seems to be capitalising on its customer service based approach especially with other high street banks taking heavy criticism over the service they provide.  Last year alone 1.1 million people complained to their bank with 100,000 of those lodging a complaint with the financial ombudsman. Many of these complaints were regarding PPI claims and extortionate bank charges.

So a bank that focuses on good customer service may be just what the British public need and will hopefully improve the service offered by the large high street banks. Good customer service is something we should demand as consumers and if you have received unfair bank charges or poor customer service why not consider changing to Metro bank.

The bank charges mean a lot of money for the banks.  They are also a trap for those reckless customers who fail to read the terms and conditions that apply to their current account.  Recent research has suggested that about 41% of people do not know the interest rate that applies to an unauthorized overdraft.  What is more, 19% of people are always overdrawn.  Whether you write a cheque when there is no enough money to cover it or take slightly too much out at the automated teller machine (ATM), banks will charge you and the bank charges will be costly.  A survey suggested that overdraft bank charges of 4.7 billion were paid by 43% of current account holder last year.

A lot of us may be asking if banks have the rights to charge us for going overdrawn.  It really depends on how you see the charges.  The issue here is whether the bank charges are allowed under your contract with the bank or whether they are really penalty charges.  That is what makes the difference between fair and unfair bank charges and it is why many courts have found in favor of the customers.

When you open a bank account, you enter an agreement or contract with the bank.  That agreement includes certain bank charges that they may apply.  Under the law, the bank is allowed to impose bank charges that reflect the amount they will lose in certain situations.