Bank Charges to go higher?

It's nice to know that the Bank of England is looking after our banking interests, suggesting that banks charge for maintaining our current accounts that they seem so keen to hold, advertising all kinds of incentives to do so over the years.

I thought that maybe they were making money by paying practically nothing in interest and lending it out 5 or 6 pct higher, or over 20%  higher through their credit cards arms.

The idea behind the Bank of England's remarks is to curb these periodic instances where the Banks have to give billions back through whatever the latest mis-selling scandal might be and allow them to make money doing what they should be doing best - running bank accounts and maybe lending the odd pound or two.

Banks strayed away from the straight and narrow years ago, as they always had a genuine need to cover their day today cash flow and mortgage lending which could involve a 25 year commitment. Clients import export needs took them naturally into foreign exchange markets and various straight forward methods of hedging exposure.

Some of the best brains around work in trading rooms and gradually more and more complex products were created by "Financial Engineers", that produced huge profits but were so complex that a non trader could never understand the elements of the transaction.

This is where Risk Managers came in, an area to shoulder the blame when things went horribly wrong and they have been ever since. This is why we might all end up paying more for our banking accounts but if you are a small business, you are probably already paying for the most basic service anyway.