Weekly Wrap: LIBOR Aside, You’re Still in Control

Willy Staley

By Willy Staley
Updated on Mon Jul 21, 2014

This week’s financial news was dominated by the fallout from the Barclay’s LIBOR manipulation scandal. The bank was manipulating the influential interest rate in order to both appear more worthy of credit, and presumably to make some money on trades. LIBOR is used to set the prices on some $800 trillion in financial instruments worldwide, according to SmartMoney, so it affects the entire world’s financial systems when it is manipulated. So much is far out of our hands these days, it can be terrifying. But even if your mortgage rate has been manipulated by traders in London, you can control what happens with you and your family’s finances, at the very least.

For instance, one habit you have that might negatively affect your finances is this: posting pictures of your debit card to Twitter and Instagram. Why anyone would do this is a matter for debate, and the strange ways that social media’s effect on our brain’s addictive centers distorts proper cost-benefit analysis. People are so proud of their customized cards and their ability to spend money in near-seamless fashion that they forget that they’re sharing much, much more than that. It’s an invitation to give away your money that only the strange landscape of social media could enable.

But for some, making payments with a magical card that instantly and easily debits your checking account isn’t enough; lots of people would prefer to slam their cellphones into other things to pay for them. That technology might not be around the corner, unfortunately. According to an economist from the Kansas City Fed, mobile payments are suffering from a chicken-and-egg problem: retailers won’t adopt because they don’t know which form to use and consumers aren’t adopting because no one accepts. Apparently, customers aren’t adopting in the way we’ve been told they are; splitting the dinner bill is not as popular a use of P2P mobile payments as the commercials suggest.

Still, tech is changing the way we interact with out banks, and the way that our banks make money off of us. Now that we can check out balances and make transfers so easily from the comfort of our own home, or on the go, banks have started charging fees for paper statements, as a means of nudging consumers away from them. This is a fee we can get behind — unlike most, this one at least has net-positive effects on the planet. And at least a number of banks are getting more straightforward about the fees they charge their customers: both Bank of America and Citibank announced that they will simplify their fee disclosures.

All these computer systems are fantastic, but they aren’t necessarily fail-safe. Just ask customers of Ulster Bank, who were without access to their accounts for two weeks, thanks to a computer glitch. Well, that might upend the thesis of this week’s Wrap — they were completely helpless in this situation.

Not all hope is lost, though. We looked at three tech-related innovations this week that might help you save money, actually. ING Direct launched an app that is strikingly similar to Urge, but is only to the bank’s Canadian customers. We also talked to a woman from California who successfully consolidated her credit card debt using LendingClub, an online P2P lending service. And lastly, we looked at a partnership with MasterCard and Facebook, which will bring deals from sites like Gilt City to your social network, possibly even personalized ones that leverage your Facebook data.

As things stand now, the computers don’t control you entirely: the ball is still in your court. Let’s keep it that way.


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