It's more a jog than a run but there is a lot of money flowing out of banks at the epicentre of the eurocrisis. In Greece in one day, €700m (£563m) has been withdrawn by savers. In Spain, Bankia has called on savers to remain calm, while furiously denying €1bn has been withdrawn, hardly confidence inspiring. Reports of higher-than-expected withdrawals are also coming out of Portugal and Italy.
Once this starts who knows where it will stop? We are not immune, particularly with continental banks, such as Santander, on our high street. People aren't stupid: they have been told for the past five years that the banking system is interrelated and can make the leap that problems with banks in the eurozone could spread to here, particularly if financial institutions start sitting on their money again, as they did after Lehman's collapse.
But should you really be worried for your personal finances?
Yes and no. There are guarantees in place for deposits. Just be aware of the limits, £85,000 per institution, and spread your money accordingly. Mortgage holders may find the clock going back to 2008 and the home loan taps turned off again. A Greek exit from the euro should increase funding costs to banks, which will have a knock-on effect on mortgage and loan rates. If the pattern of 2008 is repeated, short-term lending such as personal and business overdrafts could see limits cut.
This has deep recession written all over it and I dread to think what government finances after the massive borrowings of recent years are going to go. However, financial institutions have precious little choice than to keep buying this government debt – which is then devalued by the printing of money – because of regulation and the fact that if they don't keep buying it then what they already hold will collapse in value – a ponzi scheme no less.
I am losing hope that Europe can sort this out. There is a maddening going on its political elite as political constructs nearly 60 years in the making teeter. A global response is needed, a settlement to ensure the move of wealth from West to East is more orderly than what we are seeing. But first there will be some nasty shocks.
too taxing for hmrc
The Icaew, an independent accounting body not prone to hyperbole, has issued a red alert over plans to taper child benefit for those earning between £50,000 and £60,000. The Icaew has concluded that introducing such means testing through the tax system, already burdened by tax and pensions credits, is a "policy disaster" stating simply that HM Revenue and Customs systems "will not be ready for this". The tax system, once a global leader, is now dysfunctional thanks to Gordon Brown. The Chancellor has been warned.
Unjustified PPI attack
The body representing no-win, no-fee firms, the claims standards council – the word standards is here an oxymoron – has issued a jaw-dropping press release "slamming" consumer body Which? and Martin Lewis's Moneysavingexpert for "supporting banks over mis-sold PPI claims".
Their crime is to have written to the Justice Secretary Ken Clarke to ask for more regulation of claims firms to further deter bogus claimants. I have experienced it. In the past week I have been contacted by readers stating they don't know if they have had PPI but plan to submit a claim anyway. A quarter of all claims are from those who have never had a PPI policy. The no-win, no-fee firms are fuelling this.Reuse content