Posted: Mar 28, 2013 10:56 pm
Blackadder, thanks for replying. I know the video referred to it but this thread isn't intended to be about the financial crisis, and I don't disagree about what you said there. Here I'm really interested in how banking / central banking works (and I'm not, at least not yet, interested in their new post-crisis 'innovations'. Just the 'normal stuff').
Anyway, couple of questions (for now
)
First, do you know why banks are offering accounts with interest rates higher than the Central Bank Base rate? I mean if they can borrow at 0.5% from the Bank of England, why set up a 5% current account?
Second, is it your understanding that accounts with a central bank are separate from accounts within commercial banks? That is, a bank cannot just type a number into one of their current accounts and then transfer that into their account with the central bank?
Anyway, couple of questions (for now
)First, do you know why banks are offering accounts with interest rates higher than the Central Bank Base rate? I mean if they can borrow at 0.5% from the Bank of England, why set up a 5% current account?
Second, is it your understanding that accounts with a central bank are separate from accounts within commercial banks? That is, a bank cannot just type a number into one of their current accounts and then transfer that into their account with the central bank?