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Do you trust bailed-out banks to educate you in financial responsibility? In the UK you better not!

July 11, 2009 By Chuck

In an article this morning the Financial Times revealed that UK banks did not respect their commitment to finance “financial education”. The special financing effort only “yielded less than £1m in extra spending after nine months”:

The commitment amounted to £4m each, or £8m in total, equivalent to 0.02 per cent of the £37bn bail-out. “It’s a pittance compared with the vast scale of the problem with providing funding for financial education and generic financial advice,” Vince Cable, the Liberal Democrat Treasury spokesman, said yesterday. “It does suggest that [the government] regards the whole financial capability agenda as trivial.”

The UK Treasury invested billions of pounds in Royal Bank of Scotland and Lloyds Group to avoid them failing during the financial crisis. In exchange for this financial lifeline, both banks had committed to increase their financing for Financial Education up to 8 M GBP.

But actually, the FT also reveals that some of these “Financial Education” efforts effectively made by these banks amount to little more than publicity for their own products:

The RBS funding will go on the bank’s “Moneysense” programme of education for schools and adults. This came under fire from Which? last month. The consumer body found only four out of 20 Moneysense sessions attended by its mystery shoppers provided the impartial advice advertised, without any attempt to interest the customer in NatWest products.

So, in addition to bailing them out, the British taxpayer is paying to have the banks push more of their products on him, under the guise of “financial responsibility” education…

Can you really expect commercial banks to educate the consumer in financial responsibility? In Continental Europe, this would be considered with some surprise. It cannot exactly be said that bailed-out banks are models of rigorous financial administration, considering the issues in which they got themselves.

In addition, while there is certainly something to be said about the personal responsibility of the consumer in educating himself, you cannot confide the sheep to the guard of the wolf.

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Filed Under: Market Updates

Comments

  1. carol says:
    July 12, 2009 at 1:25 AM

    I wouldn’t trust any bank at all, whether in the US or UK. In the US, Goldman Sach or Government Sach has engineered every bubble, Internet Bubble, Housing Bubble, Bailout Bubble, Oil Bubble and no doubt another new bubble is in the process. I suspect that Cap and Trade is going to be the next bubble with so many executives in Goldman Sach already involved in Green Energy, wind energy, renewable energy or solar energy. How convenience it is to have a Global Warming president promoting cap and trade when actually it means to benefit Government Sach. Companies exceed the carbon limit will be forced to buy from a handful of company invested by Government Sach. Watch how cleverly they can collect tax in advanced by doing this. Goldman Sach is really a gangster and our financial systems is a gangster systems robbing from hard working people and giving to the bankers. I feel sick to the stomach at their behavior and I dare anybody who dares to defend Goldman Sach to do some research before you do so.