Bank Underground, the blog written by Bank of England staff(bankunderground.co.uk)

bankunderground.co.uk

Bank Underground, the blog written by Bank of England staff

https://bankunderground.co.uk/about-3/

67 comments

Bank of England blog: HTTPS only

Bank of England primary website: HTTP only

They get bonus points for their Let's Encrypt cert and a solid 'A' on SSL Labs (some amusing alt names on the cert though - not their fault and no big deal).

Maybe someone at the bank will realize soon that HTTPS is for more than protecting log-ins, it guarantees the integrity of the page and makes sure the browser displays only and exactly what was sent, with no tampering in transit.

corin_10년 전

They just chose to have a hosted blog from Wordpress with a custom domain, Wordpress chose to use a Let's Encrypt certificate and to lump a bunch of different customers' custom domains into one certificate request hence the alt names.

oarsinsync10년 전

Lots of sites using the same private key. Could this be potentially problematic?

tombrossman10년 전

Not really, the host is already trusted (as explained in the parent comment). The domain owner is free to obtain a different certificate with a new private key that only they know if they wish. When you choose to use shared hosting you are already delegating plenty of trust so it's reasonable to use the host's private key.

corin_10년 전

I wouldn't think so... Wordpress keeps the private key themselves the customers won't have access to it.

biggio10년 전

Browser not supported :D

https://www.boe-careers.co.uk/OA_HTML/RF.jsp?function_id=142....

[deleted]10년 전

beejiu10년 전

This was also the case with GCHQ's website until recently.

spicerguy10년 전

completely irrelevant point of clarification: bank underground refers to the London Underground (metro station) stop immediately in front of the bank, rather than some sort of anarchist agenda (but given UK civil servants general ambivalence towards authority there may be a slightly sly nod to the alternative reading of this).

jessriedel10년 전

Couldnt it be a double entendre? "Weather undrground" isnt anarchist, but it is a tongue in cheek way to express that its not mainstream.

colah310년 전

Although, there was at one point an anarchist organization called the weather underground: https://en.wikipedia.org/wiki/Weather_Underground I understand they had a "brick reallocation committee" that reallocated bricks through windows.

As objectionable as such behavior might be, I find the understated names pretty amusing.

coderdude10년 전

This looks promising and different. I like that they say up front that some staff opinions will align with the views of the organization and some will not. I'm sure someone will come up with something shallow to complain about but this is actually cool.

branchless10년 전

BoE are very old establishment. I think taking text on a BoE blog that it will be free speech is not realistic. Like the BBC they will be with you right until it matters. Then you are on one side of the fence and the establishment are on the other with the BBC/BoE next to them, grinning.

branchless10년 전

This blog is like a guerrilla offshoot from the BoE from staff who are trying to tell us we are being robbed blind by the banks.

Best one is this:

https://bankunderground.co.uk/2015/06/30/banks-are-not-inter...

Banks do not intermediate funds when lending they create new money. This has interest due on it. Create more to cover the interest or die.

Please HN have a read as I see so many disheartening comments on HN about finance. It's depressing.

alanwatts10년 전

>Banks do not intermediate funds when lending they create new money. This has interest due on it. Create more to cover the interest or die.

Professor Franz Hormann of the Vienna University of Economics further elaborates on this catch-22 in his banned TED talk:

https://www.youtube.com/watch?v=FYWVbdSX7B4

digi_owl10년 전

Banned?!

oneloop10년 전

[citation needed]

alanwatts10년 전

I don't know what "banned" means in this case, it's just from the title. His point stands however:

Money Supply + Interest > Money Supply => perpetual debt servitude

notahacker10년 전

This is not exactly secret knowledge you have to be a guerilla to let out. I mean, the bank itself does that in formal bulletins released on its website http://www.bankofengland.co.uk/publications/Documents/quarte... and even produces video for people that don't like reading economic papers https://www.youtube.com/watch?v=CvRAqR2pAgw

UK-AL10년 전

I believe they have reserve requirements. They must keep x% of funds lent out, as cash in a bank.

This is what stops them from infinitely creating money.

branchless10년 전

From the page:

> The fact that banks technically face no limits to instantaneously increasing the stocks of loans and deposits does not, of course, mean that they do not face other limits to doing so. But the most important limit, especially during the boom periods of financial cycles when all banks simultaneously decide to lend more, is their own assessment of the implications of new lending for their profitability and solvency. By contrast, and contrary to the deposit multiplier view of banking, the availability of central bank reserves does not constitute a limit to lending and deposit creation. This, again, has been repeatedly stated in publications of the world’s leading central banks.

chollida110년 전

user_rob10년 전

This is a really good resource for anyone interested in economics at any level, but personally I would like them to provide a children's version (Which would suit my level of interest better).

timthorn10년 전

Not saying that this is what you're arguing, but - I wish it wasn't assumed that children are only able to understand simple concepts. Younger kids might find it hard to get through dense prose, buy that doesn't mean that the ideas therein couldn't be understood with appropriate presentation.

If you've a child with a deep interest in an area, you get to the point where you've devoured the children's literature on the subject and are left grasping for new material that will satisfy their thirst for new knowledge in a form they can read themselves.

CaptSpify10년 전

Maybe "beginner's version" would be a better way to phrase it?

Paul_S10년 전

This is fluff. Is there a banking equivalent of (no longer available) NightJack?

(If you don't know because maybe you don't live in the UK, NighJack was a blog written by a cop, off the record)

dmix10년 전

I found the few article's I read on the blog had pretty high quality content. Did you read any of them?

jsprogrammer10년 전

The top post [0] leads with a factually incorrect assertion:

>Peer-to-peer lending platforms (P2P platforms) emerged after the financial crisis by catering for pent-up demand for unsecured borrowing from individuals and small businesses.

Prosper was started in 2005 and the article's primary example, Zopa, started in 2004.

[0] https://bankunderground.co.uk/2016/05/03/the-growth-of-peer-...

jonwachob9110년 전

Maybe they are referring to the Tech bubble of the early 2000's? Kinda of a stretch but still possible...

jsprogrammer10년 전

Vague terminology is vague. The article was written in the last month (presumably); referring to 2000 as "the financial crisis" would be supremely dishonest given what we have experienced since then.

I get that banks provoke regular crises, so there are many that could be referred to, but I can't imagine this article was referring to the 2000 tech bubble.

kinai10년 전

"Our goal is to bring more of our thinking into the public domain..."

Like any other bank: Rob the small people, give to the rich, make the government your bitch

spicerguy10년 전

I would suggest you find out a little bit more about the BoE. It's not an investment or retail bank, it's a central bank which is more about influencing economic policy and other banking policy than pushing money around. Interestingly the UK government decoupled the bank from direct control in 1998, which greatly reduced the risk of wild interest rate fluctuations driven by political motivations, which had caused a lot of pain in the previous decades.

oarsinsync10년 전

Note that it's a group of private bankers dictating monetary policy for the country.

pjc5010년 전

They're public bankers. It's an arms-length institution wholly owned by the UK government, which has mandated them to set monetary policy to meet statistical targets as a means of de-politicising monetary policy.

It works quite well, certainly better than when it was directly run and the UK had a lot of inflationary instability.

TheOtherHobbes10년 전

The BoE provides political air cover for political decisions. In no real sense is it politically independent. It can be relied on to do absolutely nothing to promote economic policies that could benefit the majority of the population at the expense of bankers, land owners, rentiers, and speculators.

spicerguy10년 전

The bank itself is owned by the government but has independence from it in certain matters of policy. There are certainly many employees who come from private banking backgrounds but the bank is not a private bank.

cbeach10년 전

Yikes! Do you know of a bank that has robbed from the small people? I work in finance and there's tremendous protection for the small people in everything we do. Their deposits are covered by government guarantees, whereas the richer clients are left more exposed.

But if you have an instance where banks have stolen from small people I would love to hear more about it, and I'm sure it will make front page news around the world.

spicerguy10년 전

this is certainly currently the case for the UK, with protection of deposits up to £75k for private account holders (http://www.fscs.org.uk/what-we-cover/products/banks-building...), though I'm sure we could find plenty of antecedents if we cast the net widely enough geographically and historically.

josephlord10년 전

There is the PPI (payment protection insurance) scandal in the UK. Billions has been paid out in compensation and it has been front page news.

jsprogrammer10년 전

Do you not follow industry news?

Banks moved LIBOR at will (sometimes for sushi), affecting all customers of banks.

eru10년 전

British banks (not the BoE) are shafting their poorer customers with lots of fees. They regularly get dinged for it by their regulator.

(Can't complain about eg German banks too much in that regard. But the British banks are really the scum of the earth as far as `not being evil' to poorer customers is concerned..)

xioxox10년 전

As someone with UK and German bank accounts, I prefer the UK banks:

* Free real debit cards you can use online vs crappy card that only works in person

* Free, as long as you're careful not to go overdrawn vs frequently charge per month

* Usually free credit cards if you want one vs annual fee

* No charges for depositing cheques, cash, etc vs fees

* Withdraw money for free from any other UK bank cash machine (ATM) vs lots of fees

* Get paid 5 pounds/month for having a Halifax account!

UK banks are not good if you can't keep a positive balance, but if you're careful with your money they're great. The only issue I've run into UK banks is that they'll use bad exchange rates vs German banks, but they need to make money somewhere.

spicerguy10년 전

There's a debate to be had about "no such thing as free banking" - I'm very familiar with the world of prepay in the UK and retail banking practice is a big headwind here.

stevejones10년 전

The big deal in the UK, a few years ago, was that a person would go overdrawn, deposit money to cover it immediately but then get charged an overdraft fee by an overnight process. This fee would put them overdrawn, leaving them liable for a second overdraft fee - which would be charged the next night...

This was ruled to be illegal and banks had to set up whole departments to process return claims. I suspect this is the main cause of the big headwind.

spjwebster10년 전

It was slightly more insidious than that - they were processing debits before credits, and charging a fee for insufficient funds if your balance dipped below zero (or below your overdraft limit) in the process:

https://www.fca.org.uk/news/commitment-high-street-banks-ret...

eru10년 전

Also, when you had a bunch of outgoing positions a day, they (used to?) ordered them from biggest to smallest, thus hitting you with the maximum number of overdrawn transactions.

They also charged a fee for standing orders that didn't go through because of limited funds in your account. Instead of just ignoring them.

eru10년 전

I just want them to be as `free' as in other parts of the world. Sure, they have to make money somewhere.

eru10년 전

DKB in Germany and Ing Direct in Australia are giving me pretty much free banking. (At least, free enough. No stupid hidden fees, and no yearly fee.)

viraptor10년 전

They have to make money somewhere. If it's free checking account, then maybe the account interest is low, or maybe the connected credit cards have high interest, or maybe they do a hard push on loans, or... Basically banks are not charities - in the best case, the everyday banking is simply a loss leader for something else.

IkmoIkmo10년 전

In principle I agree, that makes sense. In practice, we've had freeish banking for decades in the Netherlands and it's excellent. Further the other services are all decent, too, there's no real push on loans or creditcards. Mortgages are popular but the rates are very sensible (such that it's cheaper than renting atm, even disregarding the capital gains on your home). Below a short overview.

I was flabbergasted to hear about overdraft fees when I first saw them feature in social justice documentaries (e.g. Spent: looking for change).

My interest is low, but that's normal in 2016. .5% to .9%

Any CC payment I make is deducted from my checking acc 30 days later, no interest. It's essentially a normal debit card with 1 month free credit. After that it's 12-14% interest per year. That's very high of course, but it's not exploitative like a payday scheme. Further, keeping CC debt is quite uncommon here. And I can borrow up to $25k at 8.9% say for buying a car. That's pretty steep but not high compared to other countries, it's also not a very popular product. Mortgage interest is currently 2.9% fixed for 30 years.

As for my bank account, I pay about $15 a year for it. There's no costs to depositing or withdrawing money, putting it in or taking it out of a savings account. I mostly bank via an app on my phone, and payments arrive in minutes or hours. I don't pay anything for the shared acc with my gf either. For the CC I pay an extra $15 per year or so I think.

Now if this was a new startup in a growth phase where it's burning cash and offering free services, sure, but this bank was founded in the 1880s and has had roughly this pricing scheme as long as I can remember.

All in all I think I've paid maybe $250 for all by banking in the past 10 years.

viraptor10년 전

> My interest is low, but that's normal in 2016. .5% to .9%

Normal in the EU and other place unfortunately. Oz is still at 3.5% in saving accounts.

eru10년 전

Just to make up for the rapidly depreciating AUD? (Sorry, just a bit bitter about receiving my salary in AUD.)

viraptor10년 전

Rapidly? Slow constant fall for 3 years against USD (actually the same as 7 and 10 years ago), pretty stable against EUR, starting to go up against GBP. It's all relative :)

spicerguy10년 전

Yes, exactly. Credit is by far the biggest the driver for income in the financial sector, and consequently its biggest source of pain for those swept up in disasters of their own or others making. Anybody thinking of starting something disruptive in the fintech industry needs to have a very clear understanding of the absolutely central role that credit plays in the entire system.

cbeach10년 전

Charging fees for a service is not "robbing" anyone.

spjwebster10년 전

It is when they decide which order to process debits and credits in to maximise their fees:

https://www.fca.org.uk/news/commitment-high-street-banks-ret...

peteretep10년 전

    > Do you know of a bank that has robbed from the small
    > people? I work in finance

There was that whole subprime crisis thing.

Now you could split hairs here, and say that rather than technically robbing their clients, the banks involved merely cheated them, but as you follow with:

    > there's tremendous protection for the small people
    > in everything we do

I'm guessing you're not going to do that.

Matt Taibbi sums it up nicely, so rather than paraphrase him, I'll just quote him:

    > > about two-thirds of all subprime loans between
    > > 2000 and 2007 were made to people who already
    > > owned their homes. The targets were often
    > > elderly, in particular men and women of color.
    > > Visiting loan officers convinced these borrowers
    > > to use the homes they'd poured their savings into
    > > their whole lives as ATM machines.

    > > The pitch was: refinance your home, and get a
    > > little extra spending money each month! Lots of
    > > people went for it. But there was mischief hidden
    > > in the fine print of many of these "refi" deals,
    > > which often quickly exploded. Before long, the
    > > now-departed agent's promises would evaporate into
    > > a toxic quicksand of debt, unforeseen penalties
    > > and foreclosure.

As the same article goes to point on, Wells Fargo paid a $175,000,000 settlement for this shit. From the Baltimore Sun[1]:

    > > "80-year-old African-American resident of the
    > > Baltimore area with a 714 credit score and a
    > > rock-solid credit file who received a subprime
    > > loan instead of a prime loan, and who was not told 
    > > that she may have qualified for a prime loan with
    > > better terms."
    > > "By the time she realized she had an
    > > adjustable-rate mortgage, and not the fixed rate
    > > she thought, it was too late,"

Does it get worse? Of course it gets worse, we're talking about a bank! Not content with merely going after vulnerable people with predatory lending practices, they made to sure to refer to the POC they lent to as "mud people"[2]

Tell me again about those protections for the small people? They sound great.

[0] http://www.rollingstone.com/politics/news/the-line-that-may-...

[1] http://articles.baltimoresun.com/2012-07-12/news/bs-md-ci-we...

[2] http://www.nytimes.com/2009/06/07/us/07baltimore.html

pjc5010년 전

I don't know why you're being downvoted, there's a genuine point here. Especially if you count robosigning as well.

spicerguy10년 전

agreed - though I think the grandfather comment was probably referring to the UK marketplace and the US experience of subprime credit sales is somewhat different at the mortgage level. Payday loans are a different story all together and have the a similar, or even more vulnerable target market here in the UK as subprime mortgages in the US. However payday loans are not usually offered by traditional banking vendors in the UK and as such banks get off the hook here.

peteretep10년 전

Having personally had a £10 unarranged overdraft turn in to over £200 of fines, the idea that UK banks get off the hook is ludicrous. They've been forced to tone it down now.

spicerguy10년 전

Yes, I've been stung with these sort of charges myself in the past here in the UK - the banking code has cleaned up this practice a bit in more recent times; however I think it's fair to say there's a material difference between being stung for £200 and having your house being ripped from under you by sharp banking practice. I recommend watching the film "99 homes" - it's not a perfect film by any means but illustrates many of the coal face issues of mortgage repossession in the US.

peteretep10년 전

    > however I think it's fair to say there's a material
    > difference between being stung for £200 and having
    > your house being ripped from under you by sharp
    > banking practice

The difference is solely in scale.

spicerguy10년 전

yes, and scale is a material difference.

exo76210년 전

> Their deposits are covered by government guarantees, whereas the richer clients are left more exposed.

This is not a case of greater protection for "small people".

a) event that may trigger this protection is very rare

b) "small people" are getting shafted with excessive fees all the time

So no, you don't.

How about keeping agreements between bank and client clear and short? Richer clients don't get caught on those, poorer do.

kinai10년 전

Seems 2008 didn't happen in your reality. The small people have to suffer because if what the banking industry did. Always been that way. How brainwashed you must be to defend this whole industry which has more blood on its hand than any other. Greed seems to get even the smartest people...

Not to mention how banks now push European Countries to get rid of cash so they can earn more by bank accounts/transfer fees.

Robin_Message10년 전

2008 was certainly bad.

As for getting rid of cash, I'm confused by your comment. I live in Europe (UK) and have free banking; free, less than 2 hour online transfers; free debit and credit cards; and free and convenient contactless payment. So does everyone else. Not having to carry cash is great!

Part of me wonders where the banks are making any money, but there are mortgages I suppose (and 2008).

jsprogrammer10년 전

Banks make money through loans, they then attach interest obligations to those loans, perpetually siphoning from the money supply.