Unco-operative banking - the 'ethical' question: the expensive Swedish alternative

Appalled by the hedge fund sell-out of the Co-operative Bank, I decided to look for an 'ethical' alternative. Handelsbanken looked good: local branches that will offer a personal service but only if you either live or work locally (within sight of the top of the local church spire, apparently), and its Swedish - the Ikea of cash?. Maybe even offers fish and meatballs, I wondered. However, a cold Scandinavian chill soon descended when I spoke to an account manager at the paragon of Nordic finance. Free banking is only available if you keep £85,000 in your accounts - otherwise its £15 a month. And what do I get for that, I asked? A dedicated account manager and the chance to drop in for a chat. A chat? For £15 a month I expect meatballs and a slice of Dime bar cake - and none of those disgusting berries no-one's ever heard of, thanks very much. So, while the hard-nosed capitalists prepare to carve-up the Co-op, I won't be looking to Sweden for banking salvation, thanks very much.

Constructive Vultures? Buying into Co-operative Bank Debt

Aurelius Capital Management and Silver Point Capital - two US hedge funds with 'vulture' reputations (ie buying debt to demand stringent repayment terms from already endangered creditors) have bought bonds issued by the Britannia Building Society before it was taken over by the Co-operative Bank. The bonds rank higher than the subordinated bonds and preference shares sold to small investors, who are already faced with losses as part of the bank's 'bail-in' that is intended to raise £500 million towards the bank's recapitalisation. Vulture funds act only on their own narrow self-interest but Aurelius and Silver Point have - perhaps mischieviously - attempted to excuse their behaviour by claiming: 'We are not here to cause mischief. We want to sit down with the bank and work out a consensual solution.' A 'consensual solution' to a situation where they have no definable interest in the first place. Their actions will force the bank to pay an even higher price for the recapitalisation and cause even more loss and uncertainty to the small investors who now risk higher losses if Aurelius and Silver Point's demands destabilise the bank still further.