antonyjcbutcher

So alongside making charity cakes, soups for lunch, and some homemade granola that I’ll be trying out for breakfast this week I’ve been spending a chunk of time thinking about where to put my money – notably my current account.

The bottom line is that the money that we think is “ours”, that we go out and work for, that we spend, and that occasionally we leave sat in our bank accounts awaiting our beck and call isn’t just sat there. It is used by our banks to invest in a range of organisations, funds and syndicates. It is the profit that these companies make that gives us our “interest”. What we see as a nice little reward for staying in the black and with one bank is actually a little thank you from the bank for allowing them to use our money to generate profits. Now, there are a whole load of people who might benefit from our money. Sometimes it can be something we’d really like to invest in – the social enterprise down the road that supports young people with disabilities to get into work, or the railway companies upgrading the line to get you to work faster. Other investments, frankly, are appalling, and if you could see what your money was doing while you weren’t looking you’d send it to the naughty corner without any supper. If you are feeling strong of stomach have a little look at http://www.banksecrets.eu/#/en/Banks – which just begins to hints at some of the ways that money (perhaps even your last paycheck) is being used right now. Of course, many examples aren’t on here. Remember the humongous fire in a textile factory in Bangladesh that killed over 100 (and you only need to google to see that this is not a one off tragedy but the worst in a catalogue of fires)? Well, the company that owned that factory was in part financed by a hedge fund in the West that was in turn part funded by the deposits of everyday people like me and you.

Let me put it a different way – when was the last time that you sat down and asked your bank what they were doing with your money? Maybe you regularly post anti-war slogans without knowing that your bank is funding arms companies that still construct cluster bombs (which are notoriously deadly for civilians. Maybe you’ve just brought a more eco car – but do you know whether your bank is investing in fossil fuels – including fracking?

To be knowingly ignorant in a world full of information is not far off being tantamount to supporting the actions that your money leads to. We’ve all umm-ed and arr-ed gently about our money with the feeling that something isn’t quite right. Even if you ignore the most unethical practices then you can’t ignore the analysis from the Mervyn King (Governor of the Bank of England): “Of all the many ways of organising banking, the worst is the one we have today.”

(Analysis from Robert Peston of the BBC – http://www.bbc.co.uk/blogs/legacy/thereporters/robertpeston/2010/10/mervyn_king_says_banking_must.html)

So, what can we do about it?

As is often the case the answer is not as easy as it might seem. The Co-op bank is the best high street bank – with a strong ethical investment policy that has just been re-launched (https://saveourbank.coop/Newsletter_20Jan2015_Newpolicy). However, after it left the Co-op company it was financed by hedge funds – who still have an 80% holding. What those hedge funds do with the rest of their money is, of course, questionable.

If you are happy leaving the high street there are a whole range of other options. Building societies all offer current accounts, as do, increasingly, some credit unions. These offer you all the facilities of a normal current account (direct debits, standing orders, debit cards, free withdrawals all over the UK), but they tend to have a slightly lower payback (because they aren’t profiteering from your money! In fact some credit unions charge you a small amount for your current account but you know that all of the money is going locally).

So what am I doing?

Like most people the notion of changing banks is something that has put me off for ages. I know where my money is, I’ve got records that go back to my first CD purchase (Elton John, Candle in the Wind), and I know my account details off by heart. But this shouldn’t stop us. We have the power to choose where my money goes. So, I’m going to move banks.

Whilst there are still issues with the Co-op their ethical policy has just been strengthened. I like the idea that more local funds only support local mortgages/loans, but the Co-op also proactively supports green and ethical organisations – be it wind turbines or community groups.

To get the ball rolling I’ve got an appointment tomorrow afternoon and I’ll have to see how it goes (it’s like an awkward first date with the added element of giving them all my money). If it all goes to plan within a few weeks I’ll have to remember a whole load of new numbers, and will be able to sleep a little sounder at night.

And if you’ve got this far without thinking about changing your account – go out there and do it! There are some great resources at http://www.ethicalconsumer.org/ethicalreports/bankingindustrysectorreport.aspx if you’d like to know more.