Banks littered with conflict of interests

I AM the managing director of an independent, family-run financial planning firm in Cork.

We employ 13 people. On lodging a cheque on behalf of one our clients in our local bank today my colleague was told to please hold while the bank got clearance to lodge the cheque. Our local bank is a small bank. In fact, it is a tiny bank.

The teller went across the room and phoned what appeared to be head office. She told head office that a five figure some of money was being lodged to this person’s bank account and the person in head office said: “It could be a good opportunity for you.” The significance of this act is huge, and summarises one of the big problems with our banking institutions.

Littered with conflicts of interests, the banks are now notorious for hounding ordinary people for investment, pension and insurance business when sums of money are lodged to personal bank accounts.

At the same time, the bank has control over overdrafts, existing borrowings and future borrowings. When the person, in my example, gets a call from the investment or insurance department in the head office of the bank, how is he or she supposed to say no when the same institution could cut off an overdraft facility, the blood supply to my client’s business at the same time?

Not to mention the fact that the advice my client gets from the bank is the furthest thing from independent advice imaginable.

My client should never be seen as a “good opportunity” for anyone working in one of our state-owned financial institutions that are bleeding our country dry.

The sooner the Financial Regulator enforces the break-up of the banks so that these blatant conflicts of interest are stamped out, the better.

Eamon Dwyer

Cork city