A couple of stories that I think reflect some of what is wrong with the banking industry and may have contributed to the financial current situation.
The first happened about eight years ago when we were changing our mortgage. We were sat in front of what looked like a typical bank manager - suit and tie, middle aged, male and more than slightly patronizing in attitude as he made us feel he was doing us a favour by loaning us money. He was sitting at a computer terminal asking us a series of questions and inputting the information into a database. It became clear that he wasn't too handy at using the system and it occurred to me that it wasn't him that wasn't him who was deciding if we could get the mortgage or not but the computer, or at least the database being driven by the computer. I found myself thinking it would be better if he stood to one side and let me input the data myself!
At the time I could see no reason not to cut him out of the process altogether but I later realised that I did actually want him to be a "real" bank manager. I wanted him to have known my Dad, known me from school days - known my circumstances in a way that would allow him to exercise judgement on my behalf and input experience into the system. I found myself disconcerted by the idea of a huge network of decisions being made based on centralised algorithms.
The second story happened on my current trip to Washington. I never use travelers cheques when traveling nor get money changed before I leave but instead rely on cash machines and credit cards when I get to my destination. You can imagine therefore my frustration when I arrived here to find that both my debit and credit cards had been cancelled by Barclays leaving me in the lurch. Call centre hell is bad enough at local or free phone rates but imagine it in a busy city, on a mobile phone long distance, listening to canned music for AGES just to be told that they had cancelled my cards because they had been used abroad! I appreciate that this was done at one level to protect my account but what happened to any sort of judgement? A quick glance at my statements would reveal how much travel I do and indicate that there wasn't a problem. What about a quick call at their expense rather than mine to check?
I often enthuse about the web's tendency to disinter-mediate but maybe the banking industry is one of those cases where good middle men DO add value and maybe more of them doing their jobs properly at all levels would have kept us out of the financial situation we currently find ourselves in.