“I could see all my accounts, but on top of that also three accounts belonging to someone else: a £35,000 savings account, an £11,000 Isa and a business account,” Matthew Neal, an account holder with one of Britain’s biggest bank, Lloyds TSB, tells the BBC before further adding:
“I could see their account numbers, sort codes and transaction histories and I had access to transfer money too, if I was that way inclined. The thing that was worrying me most was: what if someone can see mine too?”
What if indeed. The bank says that only lasted for 20 minutes, but chaos at Lloyd’s and for its millions of account holders has been going on for a week as the BBC documents.
The problem with the current financial system is that money is the payment system, and the payment system is banks.
So people could not pay for their weddings, businesses were brought to a standstill, and bank branches had to send their staff home early due to stress.
With Lloyds having a bank branch pretty much in every British high street, that would have been a lot of very stressed people who once again might re-live the pains of 2008 when many of them lined up at Northern Rock to withdraw their money.
There are proposals to decouple banks from the payment system, and thus money from the payment system. A binding referendum is to be held in Switzerland on that matter this June 10th. Many central banks oppose it, but FED has surprisingly implicitly come out in favor.
If that proposal does go through, then banks would become as they were romanticized in movies. A responsible little corner with an upstanding member of the community scrutinizing your loan or mortgage application to decide whether they should give you what then would be their money, or at least other people’s money.
Rather than as it is now, with the lent money being printed literally out of thin air, until they print too much and then they ask us all for our real money.
In this case, the problems do not appear to be caused by excess risk taking with out of nothing money, but due to a transition of their IT system as the bank has apparently been bought by a Spanish company.
“Bank systems have got sticking plaster all over them,” Philip Augar, a former non-executive director at TSB, says.
Now that’s definitely where I want my savings, on sticking plasters. Because there is nothing safer than having centralized databases moving around with records of everyone’s holdings.
We do hope some admin doesn’t change all those easily changeable numbers, or worse, doesn’t lose the numbers completely by perhaps accidentally pressing a delete button.
Because then, presuming their backups are burned too, who exactly will know how much money Joe Doe has exactly, or the millions of other Joes that use Lloyds?
Well, no one. It would all be gone because all of it is I Owe U-s on a centralized database without robust validation, so making it very fragile to even a complete loss of records, and thus to a complete loss of money.