Financial

on the rebuildingsociety.com blog

21st Apr, 2015

Never Again will we Capitulate in the Face of a Banking Crisis

It’s been a busy week for the political parties as they publish manifestos. While there are broad statements of intent, there is a concerning lack of detail around banking reform and mitigating the next banking crisis. With so much debate on austerity measures, political leaders are jockey to win points for their ideas on dealing with the symptoms, rather than tackling the cause. The banking system is far from fixed and there is sparse debate on the subject…

In the seven years before the financial crisis, lending to non-financial business accounted for just 8% of the total lending by UK banks. In fact, net lending to SMEs (that’s gross lending less repayments) was negative in the Bank of England’s most recent figures. Some of this is compensated with non-bank lending thanks to the rise of p2p lending and firms like rebuildingsociety.com

The banking system needs to do a better job of supporting businesses according to the manifestos of the three main parties published this week. Labour promise to “develop a banking system that works for businesses in every region and every sector in Britain”. The Conservatives “will continue to build a stronger, safer and more secure banking system that… provides businesses with the finance they need to grow and create jobs” and the Liberal Democrats pledge to “grow a competitive banking sector, support alternative finance providers and improve access to finance for business and consumers”.

But there’s a lot more to financial reform than supporting SMEs…

Do the political leaders really think that Basel III goes far enough?!

Do politicians really believe that the reforms of the last five years have fixed the financial system, and that this is something we no longer need to worry about? Experts continue to warn that the next crash could be just around the corner, and research from NEF shows that the UK remains uniquely exposed.

Meanwhile, mis-selling scandals continue to pop up with depressing regularity – even the Pensions Minister seems worried that the government’s latest pension reforms may build the next wave of mis-selling as unscrupulous dealers rush to take advantage of vulnerable pensioners. Have we reached the goal of a financial system that is stable, sustainable and fair?

The stakes could scarcely be higher. So why are our politicians so reluctant to talk about financial reform? Perhaps they are in the pockets of the industry…? Or maybe they just think that financial reform is not a voting issue – that ‘banker bashing’ has become unfashionable.

If the new government doesn’t seek to reform the financial system, then it’s even more important we work together to dis-intermediate finance. Bypassing the banks is one way you can play a small part in helping avert the next financial crisis.

Alas it seems we’ve got a long way to go on our mission; but while society needs work, we’ll keep rebuilding.

If you’re not a member and would like to help with the rebuild, please register here.

This article was inspired by posts from Positive Money and the New Economics Foundation. Please help spread awareness. There’s no excuse to be unprepared for the next crisis.

Photo Credit: CC: Rob Taylor


23rd Oct, 2014

Traders feeling the squeeze of technology

Saxo Markets recently hosted an event focusing on the future of trading and financial markets at The British Museum. We went along to hear about how technology is disrupting this market, its challenges and opportunities, and what it means for the consumer.

Matteo Cassina of Saxo Markets outlined some of the changes in the market since the financial crisis. There is increased competition, tighter regulation and recognition that overcapacity and inefficiency are present, but being weeded out.

Value is the pressure point on the market. There is pressure on pension funds for example to find yield in a record-low interest rate environment. Tellingly, Dr Robert Barnes of Turquoise said 50% of people who have ever lived to 65 are alive today.

The speed of demographic change is posing a huge challenge to fund managers, who naturally are looking at ways to meet the needs of their customers as those drawing a pension live longer. It seems inevitable that where funds cannot find value they will either have to turn to new products or exit the market, such is the scrutiny on fees and low returns.

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25th Jun, 2014

Preparing Your Business For Any Eventuality

Dan Rajkumar, MD of rebuildingsociety shares some tips for business owners picked up during his 12 years of running businesses.

Sometimes opportunity comes knocking at the funniest of times…

We know that 4 out of 5 businesses are not looking to raise finance at any given time, but if a competitor knocks on your door tomorrow asking you to buy them out, or if you spot a great opportunity for growth, then it is best to be prepared. After all, they say the definition of luck is when preparation meets opportunity, so here are a few hints and good practice tips help you to get lucky…

As someone running a growing business, you need to know a few things you can do to strengthen your credit risk profile now, so that when you do come to borrow funds, your business is best placed to be seen as low-risk, ensuring you get better interest rates.

It will take you 15 minutes to fix a few things that could save you thousands later on… (more…)


23rd Oct, 2012

Business Desk Features rebuildingsociety.com

Investors turning to crowdfunding for financial support

CROWDFUNDING is increasingly being turned to as an avenue of funding for start-up companies. Ian Briggs reports on those aiming to make Yorkshire a key centre for the sector’s growth.

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24th Sep, 2012

Growth can’t wait for 18 months

Today Vince Cable announced that the much-anticipated ‘business bank’ will be up and running within 18 months and will operate via existing lenders.

Unfortunately, many SMEs won’t be able to wait that long for finance, while the news that it will be available through existing lenders will not be a source of comfort for people either, as many have become disillusioned with trying to raise cash the traditional way.

Vince Cable is a man who knows his apples and is clearly trying to do what he can to stimulate the economy, but people are bound to be frustrated by the setup timeframes, with the public having to wait until the publication of the autumn statement in December for details of how the bank will be funded and operated.

In the meantime we suggest those SMEs look to other sources, like crowdfunding, to access cash.

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29th Aug, 2012

Alternative finance can force historic change in UK financial services

In an excellent series of broadcasts from BBC Radio 4 called ‘Fixing Broken Banking’ the root causes of today’s mess were examined, with many pointing the finger at the rise of free banking for those with a current account in credit.

Because the bank accounts were free, the costs had to be recouped elsewhere, which gave rise to a targets culture and eventually to the wretched PPI situation, Libor fixing and complicated swaps that have put companies out of business.

The presenter recalled when decisions were made by people who valued their relationships with local businesses and bemoaned the switch to a transactional mentality brought about by the rise of global investment banks. (more…)


27th Aug, 2012

Diversification Benefits Can be Realised with a Helping Hand from the Crowd

Finance out of reach for SME'sTesco’s announcement that it is going to offer mortgages is the latest move in a series of high-profile diversifications in the financial services market as organisations look to leverage the strength of their brand to kick-start another.

Unlike Tesco, which boasts piles of cash and an almost limitless credit facility, many businesses with plans to diversify their offering will face a familiar hurdle – finance.   (more…)


21st Aug, 2012

Yorkshire Post talks to rebuildingsociety.com

This week we were proud to be featured in the Yorkshire Post. Bernard Ginns, the paper’s Business Editor, interviewed our founder Daniel Rajkumar.

‘Funds website aims to cash in as firm favourite’
Published in Yorkshire Post on Monday 20 August 2012

A YOUNG entrepreneur from Leeds is launching a new crowdfunding website to offer better returns to savers and help small businesses access desperately needed finance.

The fund-raising has valued the pre-revenue company at more than £2.5m, he told the Yorkshire Post.
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20th Aug, 2012

Savings Options

Market leading savings rates at the moment pay in excess of three per cent, but the average rate on instant access accounts is 0.21 per cent. There’s no getting around it, that is rubbish and savers have been hammered for the last five years by the recession, so why are people still looking at savings accounts?

Of course there’s not that much wrong with the principle of savings. In years past it was a safe place to put your cash, usually you would have ready access to it and it paid a sufficient level of interest to be worthwhile. Times have changed but many people cannot see past savings as a place to put their spare cash.

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14th Aug, 2012

Investments are a Risk and the Pope is a Catholic

We were delighted to see the FSA publish guidance on crowdfunding this week, although we have a different view on certain issues.Crowd funding cheque circle

To say investing via crowdsourcing is a risk is not as obvious as statements like ‘Usain Bolt can run’ or ‘Rory McIlroy could handle himself on your local municipal’, but the FSA’s guidance seemed to be imbalanced, so it’s only proper to provide the other side of the argument.
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