Because they are busy trying to pay off their losses, and strengthen their balance sheets.
Even banks have fixed costs, so the first 2% is costs and then the rest is profit.
Now that the government owns 90% of RBS and 60% of Lloyds and all of Northern Rock they are unlikely to reign in the profit making ability of banks, as the government are now making big profits from the dividends these banks are paying.
However these high rates which banks are charging are nothing more than high street piracy and its the general public who are paying for bankers mistakes. Its unlikely that this bank profiteering is going to change in the near future. Levels of bank capitalisation still have some way to go before their balance sheets will be considered strong.
There are rumours that the government will sell off their stakes in RBS, Northern Rock and LLoyds via maggie thatcher style IPOs to the general public (remember BT, British Gas, Railtrack etc etc from the 1980's). The idea behind this is that it will give the public the opportunity to profit in the government bail out of the banks. However you can bet that the govt wont do this until theyve made and once they do sell off their banking assets, then they will change the law to make banks less profitable.
Unfortunatley the whole thing is about greed. Who is greedier than who, how much you profit you can get away with making.
Its easy to blame the bankers for being greedy, but the general public are just as much to blame as the bankers. We wouldnt be in half the mess we are now if we hadnt voted for de-mutualisation of our building societies a few years back. I wonder how many carpet baggers are now complaining about the state of the banking industry now.
The likes of Halifax, Northern Rock, Bradford& Bingley, Alliance & Leicester,Abbey, TSB etc would all be around now and doing very well if we hadnt voted for demutualisation and a few easy in our back pockets. They used to pay a % of their profits back into the treasury as corporation tax. This tax money is now paid to the spanish govt as Santander own so many of our banking assets. Just makes the hole were in even deeper.
Its easy to point the finger but human greed is human nature.
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