Why are UK and French banks different?

[SaligoBay]

This isn't about the BNP, I promise!  It's a more general wondering about banking in different countries.  This is not an area of expertise for me, so excuse stoopidity.......

British banks (mostly) don't charge for running an account and (mostly) give you a bit of interest, and still manage to make enormous profits.

French banks (mostly) do charge for letting you walk in the door and (mostly) don't give interest, so I assume their profits are pretty impressive too.

Then today someone said to me that UK banks only give you interest because they earn so much from the 4-day cheque-clearing system.  He said that the minute you put a cheque into a French bank, you can draw out the money again in cash, because there isn't the same concept of cheques bouncing.

I know there are clever finance-type peops out there.  What are the reasons behind these (and other) differences?  At first, I thought it was only a matter of customer service, but maybe I'm wrong (it has been known)?   There must be valid historical reasons, yes?

Thank you,

SB, Financially Challenged Fairy 

 

 

 

 

 

 

 

[makeiteasy]

Dear Saligo,

the problem is not here.

French banks are just NOT ALLOWED  by french government to pay interest on a current account for people who are resident permanently in france(it's different if you've a non-resident account).

Please, don't ask me why(i think that the money on savings accounts is use for some differents aims, like mortgage...  but in fact it's just the law!

Cheers!!

Céline

 

www.makeiteasyconsulting.com

 

[Lizfjr]

You are quite right about the 4 day clearing issue in the UK. It's basically a fiddle whereby your money 'disappears' into a black hole (their account) so that they make money on the transaction. It's long been known about and is illegal in some Scandinavian countries where it is seen for the scam it is.

 

I recently heard the system in the UK defended on the BBC Moneybox programme by a spokesperson for the industry who said that it had never been changed in the UK 'because customers hadn't demanded it'. That week, the Moneybox programme received its biggest ever number of emails from listeners saying 'oh yes we do'.

 

The system can be changed, but the banks in the UK simply will not invest in it.

I also face a scam every month when I send money over to my Spanish account. My money again 'disappears' somewhere between Lonodon and Alicante for four days, and I have to pay a charge for the privilege. Really wierd when I can go to a hole in the wall in Sapin and the money is instantly debited from my account in Manchester.

Liz

[Teamedup]

The banking laws are different in both countries.

And pre euro there was at least 3days before a cheque was cleared sur rayon and up to 15 days hors rayon. AND cheques could be bounced a long time after they had been cashed. La Poste still has over a week's clearance on some of it's savings accounts.

Many things did change since the euro, however, I have still seen more 'unusal' accounting systems with the banks here than I ever saw in any british bank. And would recommend everyone to always check all bank statements, but particularly in France.

ie I couldn't work out what a Super U CB payment was. What on earth made me check through my accounts a year earlier, I don't know,  but I did and this sum had been debited a year earlier. AH OUI, the CB centre in the region said, we put everything through twice........... hardly twice, this was a year old stuff........ I won't post all my other problems with fast and loose accounting, other than to say I pay close attention to what is on my statements.

Yes SB they are different.

Incidentally I transfer money back every month at the moment and from HSBC to HSBC it takes three working days, which is what it takes in the UK for a credit transfer to go through......... so not too bad.

[Teamedup]

Just checked my bank statement and a local cheque I paid in on the 9th of Sept had a date de valeur of the 13th of Sept. I believe that the Societe Generale used to use credit and debit on the date one paid in and probably still does.

[SaligoBay]

Thank you for your input, everyone.

Now, this issue of bouncing cheques (not to be confused with the Bouncing Czechs, who, disappointingly, are an aged dance band from Tucson Arizona).

Stolen cheques seem to be an enormous problem in France, with shops often asking for 2 pieces of ID, and some places refusing to take cheques at all.

I've lost track of my question now, that's how confused I get about finance..... ..... something about what protection is there in the cheque system, and who's it for..... I think.