Saturday, February 01, 2014

Did Lloyds Bank have a heart attack last week?

Last Sunday, "hundreds of thousands of customers were left unable to use debit cards and 7,000 cashpoints" (Daily Mail).
The BBC News website said the cause was "a hardware failure" but - perhaps in an attempt to reassure us - the bank told them "the faults were not caused by any external upgrade work or cyber attack."

Funnily enough, Sunday was also the day that Lloyds borrowed an extra c. £766 million, according to the Wall Street Journal:

Source: WSJ
Just in time - or very nearly so, anyway?

As it happens, our current account is with Lloyds and earns 0% interest. This Harvard economist has just withdrawn $1 million from Bank of America for exactly that reason: the odds against a collapse, though presumably small, are not zero, so the risk to a depositor is underpriced.

Weekends seem to be bad for banks: on Saturday, September 13, 2008 the Federal Reserve was in talks with Lehman Brothers, Barclays backed away from making an offer (as reported in the NYT next day, Sunday) and the bankruptcy filing came on the Monday - at 1.45 in the morning. Not much chance for the likes of you and me to queue up at the counter.

Shoebox or bank account, bank account or shoebox? So hard to decide.

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