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Banks, us and money… April 27, 2009

Posted by @Karen_Fu in bank, change.

Instead of changing the banks, maybe we need to change the way we manage money. The ripple effect coming from banks is affecting everyone. Recent news have reaffirmed my thoughts on personal financial management as well as how businesses should run. And I do believe the whole banking industry will get a lot worse before it gets better.   Many times over, I believe that most of the troubled banks in contrast of the auto industry would need to just go bust or downsize for the main reason that it is not sustainable for them to continue hanging on on a distressed note. From a consumer level, the problem arises mainly from greed and spiraling credit debt. From a business point, it is all about triming down greed and triming down failing business sectors and derive new ways in borrowing and lending. We need to change the way service is delivered to customers. That includes handling materialism in an optimal way (since eliminating materialism is impossible and also impractical). Credible lending to useful investments that are ethical and healthy. Basically we need to wind back to basics of saving and buying responsibly. Borrowing to live well on one hand improves the living quality in the short term. But it fails in the long run. Debt on good paying investments, which will pay itself after the selling is more than fine. But sadly this is not the case. I have personally witnessed many people who are spending way beyond their means. Just recently, one local man in his late 60s was paying his credit cards’ debt at a foreign bank’s self banking loby. I was there to deposit and he was there trying to figure out how to pay through the automated machine, which was entirely in English. My eyes popped as I saw the few statements he had in his wrinkled hands — all mounting to a scary sum of US$16000 that month ! And he was not a well-off person to start off with. Maybe he was paying for his family, but I thought that kind of bills is really unncessary. Perhaps the current financial turmoil is a good time to clean the entire market and start anew.  I have posted some thoughts on ‘credit’ and ‘products’ over on my other blog about it. I think consumption does need changing. It is a matter of how brave we are to change. It doesn’t mean a cut in living quality. But a cut on things that we really do not need and spare some time and effort on those areas that we need to keep us soulfully and physcially healthy. It makes a lot more sense if we could sit down quietly and recount what is supposed to go out of our lives and what is supposed to be included. If we care to face the deal and make the necessary adjustments, we actually do not need to fear if the banks do fail. Then life would be more in control with a way more wholesome and debt free !


My other blog that mentions about credit and product.

The Stress Test on Banks

New York Times on Banks liquidity

Here’s a stupid way to fix the banks: Change the rules!


1. Christopher Laney - April 29, 2009

You are correct, Karen. Society as a whole will have to rethink what it really needs to live a fulfilling life and what it doesn’t. The temptation to buy stuff is great, but it is just throwing money down a void that can never be filled by material things. Nice post.

2. Karen - April 30, 2009

thanks for taking the time to comment. I’m glad you feel the same too. I think a lot of stereotypical thinking about status and material life needs changing. Maybe, just maybe… banks could alter their way of business to encourage healthy habits of spending..

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