When I was a young stripling (yes, before big bang and city deregulation) there existed a very different financial world. The High Street banks catered for personal and business banking; you received your salary in the form of a cheque, which you had to queue to pay in at your branch. When you wanted cash, you made a cheque out and presented it at the same branch. Overdrafts (which were short term loans rather than a permanent facility) were negotiated by interview with the branch manager, in person. The branches, if I remember correctly, were open from 9.30 until 3.30 Monday to Friday. It was all very tedious, time consuming, inconvenient and wasteful. However, we were customers rather than consumers and it was unthinkable that your money wasn't safe in the bank.
We had building society accounts as well. No chequebook, but a passbook in which deposits and withdrawals were entered neatly in ink pen, with a double underlining made with pen and ruler at the bottom of the thick rag-paper page. Building societies were still mutuals in those days, often with a single large branch in their home town. Your savings were quite literally as safe as houses. We were members, not customers or consumers.
In London, in the City, there was another type of bank, and one we knew only by repute out in the wilds of Suffolk. The merchant banks were an ancient and discreet part of the city, with names that seemed to stretch back to the Medicis and the caste of merchant princes. Merchant bankers were very distinguished gentlemen who supped with ministers and captains of industry; a discreet comment at high table would topple a minor dictator on the other side of the world, fund a new mine in Africa or squeeze an uppity entrepreneur back into his place. Sometimes horrible things would happen to a merchant bank, but the whispers barely reached beyond the old city walls as the others rallied around and mended the tear. Merchant banks had clients.
There were a few private banks as well; high street banks for the internationally wealthy and the monarch, with offices in Mayfair and St James and liveried doormen, or parade-polished members of the Corps of Commissionaires sporting a double row of medal ribbons, guarding the washed marble steps.
Between the 70s and 90s this all changed. Saturday morning opening, cheque guarantee cards, the novelty of an ATM, direct debits, BACS, and the blurring of all the old distinctions in a maelstrom of takeovers and demutualisations. All the old relationships were trashed and suddenly we were all just consumers; consumers of financial products in the same way as we consumed food or clothing or motor cars.
Of course we lapped it up. Everything just became so easy. Money was fun. All that careful budgeting to ensure you wouldn't go overdrawn when a quarterly bill came in was so much ancient history. It had a downside, though; those without access to direct debits and monthly accounts were non-persons. And then the branch staff all went and the branches closed and sold off. There was no-one to talk to; credit scoring was done by computer. Bombay call centres replaced familiar English regional accents on the phone with a comic singsong babbling.
And now of course they're all worthless. Even the private banks became enmeshed in the endless multiplication of money in which 'real' credit was multiplied fifty times or more creating a vast tsunami of credit and no worthwhile assets on which to spend it. Of course it was all doomed to end in tears.
In the US they've already decided it was the bankers' fault and the torches have been lit and the hempen ropes slung over handy tree branches just awaiting the fair trials. Well, no-one is going to cry too much over a few scapegoat bankers.
But when the retribution is done, wherever it falls here, let's really hope banking doesn't go back to the 70s. Because it was crap.