What really happens when your local bank closes

We have become used to trading accusations about the way the big banks – which account for practically all banks in this country – have been progressively turning their back on the real world in favour of the speculative one.

A new report by World Development Movement and Friends of the Earth Europe sets out how they are increasingly involved in speculating in food derivatives – pushing up the price of basic foods – and financing land grabs in Africa.

Farming Money names Barclays, RBS and HSBC, and sets out some of the grubby activities that they put our money towards.

In the face of all that, the fate of one small community on the Kent coast may not seem important, but it is the other end of the process.

So spare a thought for the people of Tankerton in Kent, who lost three bank branches in a few short months between 2010 and last summer.

Many of them switched to NatWest when HSBC and Lloyds TSB closed, because they understood that NatWest had made assurances that they would stay put.

In fact, the question of whether NatWest’s advertisements ridiculing their opponents for closing branches was quiet fair is due to be adjudicated shortly.  Sure enough, in July 2011, NatWest closed too.

But what is interesting about Tankerton is that the local economy was studied closely after the closures by the Campaign for Community Banking Services. 

What they found was not just huge inconvenience, especially for business customers who needed an hour at the end of the day to drive their takings into Whitstable. But even more important was the local economic impact.

Most of the businesses they surveyed reported a 10-20 per cent loss of business because people were not coming into the high street to do banking business.

It was precisely the phenomenon of the ‘tipping point’ outlined a decade ago in nef’s report Ghost Town Britain.