The growth in profitability of banks and the strengthening of their balance sheets over the last couple of years has little to do with the very well-rewarded efforts of the chief executives. It’s been much more to do with that old fellow in the Bank of England, who kept the bank rate very low. This has enabled the bank to give derisory (and dishonest) low interest rates to savers, many of whom depend on dividends to supplement their pensions. In my case, I receive 0.22% on savings, with First Direct, a little more if I lock it away for months. First Direct then lends this on to mortgage applicants at “generous” rates and to credit cardholders and overdraft customers at anything from 8% to 28%. It hasn’t yet occurred to First Direct that there should be a link between what it can earn from the savings and what it pays for the savings. No effort by the bankers, yet big bonuses for their CEOs. Altogether a shoddy lot, best done without.
West Kirby, Merseyside
• Readers of Margaret Heffernan‘s 2011 book, Willful Blindness, will view the behaviour of Barclays’ staff (Barclays fined £290m as bid to manipulate rates exposed, 28 June) as yet another example of the kind of behaviour central to her thesis. She gives various reasons why it occurs and why whistleblowing is so unusual. An interesting one is that paying high salaries dulls the moral sense of recipients. The prospect of more money reduces people’s sense of connectedness to the community. The psychology of this behaviour has been the subject of several academic studies. Maybe it’s time the findings are taken seriously.