Morning Line: Is it just plain wrong to buy bank shares?

Er..no . Buy them would be better advice imho [ but I know nothing DYOR]

Did this lady pen this article afte speaking to a man in a pub? Banks bullying governments? Like the way Lloyds bullied Gordon Brown in order to pull off, according to Ms Hyde, "the best deal it ever made"? Or the way Mr Darling screwed £2.5 billion out of the banks with his utterly stupid bonus tax?

On reflection, I think this article was written by a man in a pub under the nom de plume of Deborah Hyde. Either that or I want some of what this woman has been smoking.

My son has read some of these Citywire comments and he asks whether your people go into work wearing big noses and clowns shoes.

It is obviously in the governments and taxpayers interest for the banks to prosper and this they will certainly do. It would be a fool who ignores bank shares as a part of their overall portfolio.

Utterly foolish missive from Ms Hyde. Her point is...?

A poor article with no point, should we simply accept this level of poor journalism.

Oh Deborah, no mention of Barclays, HSBC or Standard Chartered? Should the article be called "Is it just plain wrong to buy some bank shares? or is it that the succesful banks that managed their way through the troubles do not meet your requirements for a story. Banks have become agressive businesses over the last 40 years encouraged by the Governments, shareholders and regulators yes but do not mix their perfrmance with old fashioned service and care.

A bit late now; should have bought when they were skint.

Not sure I follow the drift of the article. In response to the headline yes yes yes back up the truck and buy. I have been buying for the last 12 months or so and am buying more RBS and LLoyds. Daniels and Hester will deliver. Gibbs knows his banks I know that from experience. Don't get too misty eyed about Standard Chartered or HSBC. They were involved behind the scenes in advicing Gordo doing their level best to screw Lloyds and RBS wrt to didvidends etc. It was dog eat dog and Standard tried to do its utmost to encourage the Govt and FSA to impose the most draconian terms possible. too bad the bonus legislation afftected them as well. It has not stopped them bleating though and threatening to relocate.LOL there's little upside in Stan or HSBC but loads in LLoy and RBS

One too many drinks Deborah? A quite rambling and incoherent article. As someone who bought into Lloyds just before the HBOS debacle I sincerely hope the shares will return to fair value and fully intend to hang onto them.

Some considered analysis would reflect better on Citywire.

I am starting to realise that Citywire is about the same level as the "Daily Mail"

Whilst the great british public continue to live beyond their means ie borrow from banks to fund lifestyle rather than save for what they can then afford, the banks will continue successfully to behave as you describe. As someone who decided it was preferable to be a creditor rather than debtor and able therefore to avoid the clutches of the big banks I have little sympathy with their victims. I was not born with a silver spoon in my mouth, but was brought up to be debt averse. Dickens is quite good on this subject!

We live in a freemarket economy and unless "constrained" by government the banks will continue to maximise profit for their shareholders(and senior employees). So until the government breaks them up or effectively moderates their behaviour the banks are a sound investment. There is little downside risk whilst they remain too powerful to fail. The ball is in the politicians lap: what chance is there of it ever being grasped? Cynically Yours. John

Oh dear. rambling and drunk. Not a good start to my post holiday musings is it?

My point I thought was quite simple.

Banks offer good returns precisely because they know how to play the governments and regulators and how to squeeze every last drop out of their customers.

But as people looking for a good return isn't it a little worrying that they seem to be behaving much as they did in the run up to the crisis?

Some commentators are now talking about the fact that excess capital in the sector could lead to more mergers - and therefore less customer choice.

And if we're unhappy customers - as many Citywire readers are - doesn't deciding to invest present something of a (moral) dilemma?

From the answers here it seems not. Must be just me then.

No, it's not just you. There's a heck of a lot more customers than there are shareholders (even if some, like me, are both).

Split them up and mutualise the retail side.

This is not a good article but Deborah Hyde deserves credit for addressing her critics and the reply is better than the article.

If the bank is reliant on a state guarantee then yes, it makes them an unethical investment.

I am not sure that so called ethics has any real point in investment; it might make one feel good by taking a moral position on any particular company's perceived dodgy dealings, but for an individual investor to eschew buying a share will have little if any effect; there will be too many who will. If we concern ourselves overly with the ethics factor one could argue that buying a share in any company may be morally questionable - someone can always find something unacceptable about a company - one man's ethics is another man's pain in the butt. As far as banks are concerned, since they are so close to one's livelihood, let competition do the talking - a bit of a quandary I'll admit since there is not much to choose between them. In any case government is supposed to set society's tone of behaviour (ha! ha!) through legislation - write letters to your MP, it might have some effect.

We always have to compromise our ethics with reality. Yes most banks behave like sociopaths. Ideally we would not deal with them at all but it is unavoidable. The best answer might be to make some money from bank shares and spend it on worthy causes (whether or not charity begins at home :-)). As far as services go you can get most of what you want from Nationwide Building Society or the Co-operative Bank.

This article is a triumph for ineptitude.

I could find no reason not to invest in banks in this article....I might even suggest that the writer has an IQ of a manhole cover !

In my book the only reason to buy shares is to make money.

Over the last year or two .......you could have made a very good return in the banking sector

Banks are still an interesting area in my opinion......whether you buy and sell quickly or hang on in for the long term.

It stands to reason that big bonuses to Bank managers are only possible if they make a substantial profit. In the past workers (including myself) were paid a bonus (only) if the firm made a profit. The bigger the profit the bigger the bonus. Tis went all the way down to the tea lady. We all need the services of a bank. I wonder what would happen if the Government forced the banks to show a loss by indiscriminate lending (as they did before) then did away with the banks, where would the critics put their money, how about a tin box under the bed?

I could understand banks' ineptitude if dealing with money were an activity peripheral to their core businesses.

And to pay bonuses while writing off poorly assessed debts!

The bonuses and the basic pay for the bank bigwigs are grotesquely inflated. That is a separate argument from whether bonuses should be paid at all. Banks are usually conglomerates where some divisions do well while others sometimes do very badly. To reward or punish every employee as if they shared responsibility with others doing different jobs, perhaps in different continents, is unfair and poor motivation.

It's interesting that some responses here are focussing on payment of bonus.

I think that is a separate matter to whether its a good thing to invest in bank shares.

The payment of high bonus's within an organisation that needed public funds to continue trading...to a level where "we" control the banks

Is an outrageous situation.

That is however a different subject to "should we invest in banks" to make a good return.

To repeat myself ...........yes we should continue to make profit from bank shares increasing.....but at the same time it would be nice to see various bankers hanging by their dangly bits outside the Tower of London.

But in life you cant have everything .

( unless you are a Banker of course )

Deborah,

Please stop perpetuating this myth that the government GAVE the banks billions of taxpayers money as evidenced by your comment "here and abroad the bailed out banks have spent millions of taxpayer money".

The government took a large stake in the banks with taxpayers money which is in line to make the taxpayers around £27 billion profit. (see another Citywire article for this) They also guaranteed the banks at extortionate interest rates.

It is wrong to keep making these idiotic comments. Simply, the government invested taxpayers money in the banks in order to prevent them going bust. All money put into the banks is returnable to taxpayers at a profit.

This is probably the only time any government in history has invested taxpayers money wisely that will actually make a handsome profit for said taxpayers.

The Emu

Dear Deborah,

In case you havent realised it all banks are not the same.

Do you treat that lovely spanish bank that we are giving all these new branches and customers with the likes of HSBC who if they would only keep away from USA ( I still remembert Crocker and cant forgive Household ) could probably have ruled the world.

Unlike some rude commentators here, I say this article is good. And yes I do think banks need to be heavily regulated. Paying large bonuses with public money is unethical. Period.

Unlike some rude commentators here, I say this article is good. And yes I do think banks need to be heavily regulated. Paying large bonuses with public money is unethical. Period.

Period.............now who uses a word like that.