As promised here is the second of the Views of BOF. If there is something that you would like BOF to comment on, or you take exception to what they say then you can email them or of course leave a comment on the individual posts.

I’m told there are 27 bank outlets in EL Ejido and I’ve counted at least five in Almerimar. There are over 250 different banks in Spain dominated by the two giants, Banco Santander and BBVA. Why so many you may ask? That´s simple. We can´t survive without them and they are very profitable. Like many other professions along with solicitors, estate agents and dentists they do not have to buy raw materials, manufacture anything, tie money up in stock or distribute their goods. Without banks you can´t buy or rent a home, use a credit/debit card, hire a car, buy on the internet, book a holiday, pay for an airline ticket and in many cases get a job. Spanish banks are notorious for high charges and often poor service.

Apart from making exorbitant charges banks make most of their money from lending. They prefer to lend to the rich at preferential rates and exploit the poor by lending at even higher rates and charging bigger fees, because they say there is more risk. As we have seen recently banks are increasing their lending interest rates despite lower central bank rates. When customers have problems meeting their commitments, often because the bank lent them too much money in the first place, they write pointing out that they have exceeded the terms of their agreement and charge 25€ for sending the letter. One major UK bank recently wrote to all its borrowers with fixed term tracker mortgages telling them that at the end of the period the bank would, as a concession, continue to offer the same terms. They also added that there would be an up-front fee of up to 7,500€ if they took up the offer.

Here is just one of the many “scams” used by banks today. A major utility supplier advises the banks that in a few days it will be sending out its monthly bills. They tell the banks precisely how much each customer will have to pay by direct debit. The bank knows that 8 million of their customers will have to cough up within a few days so debit their accounts with the amount due which may be an average of, say, 250€. This money mountain, which technically still belongs to the bank´s customers, is then invested on the “spot market�? or lent to a “safe�? borrower (maybe a government) at 2-3% above LIBOR for a few days. In this example my calculations show that the bank makes over 1.5€m in just 3 days. The profit appears on the right side of the bank´s monthly P&L accounts so the shareholders are happy. The Head “Honcho�? gets his monthly bonus, on top of his 5€m salary and most of the banks customers haven´t realised the money was taken from their account prematurely. Senor Grumpy, however, realises what´s happened and writes to the bank complaining. After a few weeks and more reminders he receives a computer generated letter signed by “The Customer Services Manager�? saying that they have fully investigated this matter and have discovered that through no fault of their own a bug got into the main computer which caused a “glitch�? in the system. This did not compromise any of the built in security systems and as a gesture of good will be crediting the customer´s account with 100€ as compensation for any inconvenience this may have caused. So even Snr. Grumpy is happy.

Good business practice, fraud or breach of duty – you decide? Either way it’s called “Capitalism” but not by me!

I heard recently about a guy who spent 10 years living on an old boat he built and sailed to Vanuatu in the South Pacific. He had no money whatsoever and survived by fishing, doing odd jobs and bartering.. When he came back to Europe he married a Dutch girl and is now back in the Pacific as happy as a sand boy. So we can survive without banks but not here!

About Almerimar

Almerimar is located in the region of Andalucia, Spain. The nearest airport is 30km away in Almeria. Other airports that are within 3 hours include Malaga, Murcia, Granada, and Alicanti. Other holiday resorts in the region include Mojacar , Aguadulce and Roquetas de Mar

Almerimar is also one of the largest marinas in Spain with over 2,000 births and excellent boatyard facilities.