I do wish I could do the same as what you’ve done and disrupt the Canadian banking system.
The UK banking system seems incredibly more efficient and fair to consumers than the Canadian banking system does.
- fellow Canadian annoyed by our banking system
Having challenger banks makes it interesting as it pushes me to think more outside the box and have ammunition to convince internal stakeholders to experiment with new concepts.
I also have a hypothesis that there are some things you can do digital-only and some things you need some human interaction so looking at what challenger banks are doing is a form of validating my hypothesis.
I think thats the point of this push by the Bank Of England. UK high street banking was dominated by a handful of huge, old, banks that had to be bailed out during the 2008 banking crisis because pretty much the entire population used them. A larger number of smaller banks reduces the moral hazard around "too big to fail" banks, allows management who cause a bank failure to lose their jobs, their share options, and their company, and reduces the chances of the government having to nearly bankrupt itself to bail them out.
Plus if London wants to continue to be a world centre of finance then encouraging innovative new banks to base there cant exactly do any harm.
The bailing out procedure should become a prepackaged administration process via the central bank. Banks should know if they exhaust their capital buffers the bank will be placed into administration and refloated by the central bank. ALL equity holders in the bank will make a total loss.
That then sets expectations correctly.
Argentina defaults about once a decade.
I wonder what would move you to make such an obviously false statement.
Zimbabwe would like to have a word. I bring this up not to be snarky, but because that was the thinking of the president at the time - he once asked "Have you ever heard of a country that collapsed because of borrowing?"[1]. I suppose he said this before the hyperinflation kicked in.
1. https://www.economist.com/news/middle-east-and-africa/217314...
US banking is slightly easier, in the sense that one may be able to either go through the tortuous process of setting up your own bank, or buying a corporation with the requisite licenses and (ideally) existing customer base.
EDIT: Rogers Communications (a Canadian telecommunications provider) applied for a banking license in September 2011 and launched in 2013[1]. I believe the bar is somewhat lower for existing domestic/Canadian companies.
That said, once you get there, the sorts of things you're allowed to do as a bank are pretty staggering (but this tends to lead to efficiency, and in turn stability).
Added: There is a golden path to becoming a bank under the Federal Bank Act these days, and it generally includes becoming a creditor first. Much of the process is about waiting for nearly inevitable approvals.
The regulators in the U.S. will finally give in, but we're more likely to see a 'challenger' bank as a spin out of an existing bank over the next few years IMO.
N26 and other UK/European challenger banks are entering the U.S. market this summer, but they will not have a banking license.
[1] https://www.americanbanker.com/slideshow/rebirth-the-de-novo...
It was a bit more opaque back when we did it, before us only a handful of new banks had been created since Metro bank, and that was the first in 125 years..