The biggest difficulty I've had in the UK so far has been getting a bank account. I won't bore you with the details, but I'll summarise by saying that when your core business is to hold money for people so that you can leverage it to lend to other people, and your policies are so stupid that you can't hold money for people, it's no wonder you suffer in a credit crisis. This video captures my experience pretty well:

Feeling pretty helpless about the whole thing, I did some thinking about what my own bank would look like if I could open one. StovellBank would provide:

• Ability to open an account (in a person or company name)
• Ability to transfer funds electronically into and out of the account
• A debit card

A small fee would be charged for holding the account. Balances wouldn't be allowed to drop below 0, so no credit facility is needed. Cheques, handing out cash and branches are all a thing of the past and wouldn't be necessary in StovellBank.

StovellBank wouldn't provide any form of credit or lending, and wouldn't leverage the deposited funds in any way, so there would be no fractional reserve lending nor the need to keep tight control over reserves. All money would sit in an interest bearing account of the Bank of England.

Founding a bank in the UK

The biggest hurdle here seems to be getting a sort code to participate in electronic transactions. Sort codes are allocated by the UK Payments Administration, and bank transfers are settled by the CHAPS group.

Where it all falls down is that to participate in CHAPS, you don't just sign up - you have to become a member. The membership criteria looks pretty daunting. Banks in the UK are also governed by the UK FSA. All in all, I get the feeling that creating my own bank would involve a lot of lawyer fees.

New Zealand

While opening a bank in the UK is difficult, opening your own bank in New Zealand might not be so hard, as long as you don't offer banking services to New Zealand residents.

This is probably a venture that go on the back burner.