UK Population's Attitudes to Banks and Banking Crisis - Essay Example

? Attitudes of THE UK population towards the banks and the banking crisis – Client: FSA Financial Services ity) University Date Background Banks are among the institutions that for a long period have been respected and held in high esteem by many people in the United Kingdom and the world as a whole. That is why many people all over the world have known no other place of putting their money apart from the banks due to the trust that they have had in them together with trust and security. The present financial meltdown offered an opportunity for the central banks to act as protectors on the monetary system. However, the policymakers together with journalists do not take the role of bank seriously in stabilizing the economy and offering a platform for growth in future. Some economists cite the money supply’s nationalistion as a cause of the cycles of business. There are two major schools of thought opposing the present practice of the central banking. A hundred percent reserve banking authorizes that full amount of every funds of depositors is available in the reserve; that is as cash or even other assets that are highly liquid, each time the depositor had the authority of withdrawing them on demand, such as a current account (McGivern, 2009). This would actually do away with or at least reduce to some great extent, the finial risks that are associated with the bank, as all the money that is required to pay the depositors all the times would be in the banks’ reserves. In addition, this kind of banking would do away with the need for a lender of last option; for instance a central bank, which is usually required to support the system of banking during periods of systemic danger or even economic contagion. According to the free banking, it is the politicization and monopolization of the supply of money that being about economic instability and nothing erratic or immoral is per se if the banks produce their own currencies following competition and the danger of insolvency. The public perceptions as regards banking and the financial crisis is important as much of the discussions between the two viewpoints is on an empirical contention regarding the level at which the general public acknowledge that the demand deposits are lent out by the commercial banks as loans. When we take a look at the hundred percent reserve position, we find that the development towards the fractional reserve loaning took place via legal plunder and scam. In the viewpoint of the free banking, it is due to the fact that the banks have given response to the clients’ desires or wishes for instant access funds that have a positive rate of interest. Until presently, this has been on the basis of assertions. The aim of this study is mainly to obtain some preliminary empirical evidence as regards the attitude of the general public towards the banks in the United Kingdom and the financial crisis. Research objectives The thesis of this research has some specific objectives which are mentioned below: To examine the potential of banks in the United Kingdom. To examine the present or available financial practices of the United Kingdom population such as: Current accounts; they are in need of the current accounts for the purposes of their daily operations in which they receive funds such as benefits, wages, pensions and they make payments of utility bills via direct debits and many more (Proctor, 2008). Personal financial accounts; the people of the United Kingdom need to borrow the funds for their individual financial needs. They require the money for purchasing vehicles, personal and consumer loans, mortgages and home finance, and household appliances. Business finance; it is true that the business community require funds for the purposes of investment. The British people needs the development of properties, setting up of new businesses, expanding the available ones, purchasing of the stock for the warehouses as well as shops, purchasing the very costly medical equipment in the hospitals. To examine the way the financial needs of the British people can be met by the bank’s financial products. Moreover, it is true that most people of the nation are in need of the financial services offered by the banks but might have been held back by some reasons, or have more reasons to go to the banks to put there their savings or even get loans, and this is what we are going to establish in the survey. Research design This survey will follow a specific kind of design that most fits the kind of study being carried out and one that is likely to give the desired results, with the costs and time together with some other important aspects of research taken into consideration. The selection of sampling will be restricted to the city of London, as it is the city that has the highest number of financial institutions as well as density of public banking. The kind of technique that will be used in the study is known as a multi-stage purposive sampling method. This kind of technique is chosen because of the practical difficulty in the employment of random sampling method in the collection of data. This will involve the choosing of a participant; that is if the participant who is selected is not in a position of taking part in the research, an approach is made to the next individual who is available. The bank’s selection under survey will be on the basis of purposive sampling method; three branches of every three of the oldest banking institutions, three of the older ones and three of the latest banks. All these will be added up to make the total twenty seven banks chosen. There will be a self-administered questionnaire given every respondents who will be the clients at the premises of the banks within the opening hours of the banks between 8.00 a.m and 1.00 p.m. The completed questionnaires will be collected between the month of May and July. Data collection The collection of data is another important part of a research or study as it is the center or core of the project. The questionnaire of the survey will consist of two parts. The first part of the questionnaire will deal with the socio-economic aspects of the participants. All of the participants will be required to respond to the questions that will cover age, gender the bank patronage’s duration and the bank account number of the client, and they will be in nominal form. Then the second part of the questionnaire will include the attitude measures of the scale of PFD (perceived financial distress) and the scale of ATB (attitude toward banking), which will be developed for the purpose of this survey. Workers of six banks will be given special training; they will consist of the Head of the corporate planning department, the head of the department of treasury, the branch operations manager, the head of internal control and audit, the officer of business development and officer in the department of treasury. These professionals will help in the facilitation of the assessment of the perceptions of the clients from different viewpoints. The researcher will develop a twenty one-item PFD scale that will be used in the measurement of the perceived economic crisis. In its development, there will be a Likert scale question that be used as it enables the participant to show the closeness between their feelings and the statement given on their scale of rating. The items will then be scored on a five-point Likert kind of scale that will range from ‘strongly agree’ to the one reading ‘strongly disagree.’ The items will help in the generation of issues at stake’s statistical measurement. There will also be a pooling of fifty four items from the professional’s conference to show or find the total number of usable items after they are subjected to the inter-item and item-total correlation. This will follow the discarding of the statements of item with not more than r Read More