In the comments of a recent Positive Money blogpost on central bank digital currency (CBDC), Stephen Hart raised an interesting question:
“A public company to provide accounts direct to ordinary people, run by the Post Office – do you remember the Girobank? That was its exact description, when it was set up by the Wilson government in 1968. It worked so well that it was privatised by the Thatcher ministry in 1989-90, then taken over by Alliance & Leicester, and in turn became part of Santander. In other words, it disappeared, becoming part of the private sector. What makes Positive Money, or anyone else, think a new such enterprise would fare any better?”
While I sadly wasn’t old enough (I was only 10 when it was fully absorbed into Alliance & Leicester) to remember it, I agree we have a lot to learn about the experience of the Girobank today.
As Stephen explains, the Girobank, named after the ‘giro’ method of transferring money between bank accounts (and not to be confused with Venetian public bank established in the 16th century bearing a similar name!), was set up by the Wilson government in 1968. Originally named the National Giro, it not only introduced a new payments system which laid the foundations for the modern means of money transfer we enjoy today (finally bringing the UK up to speed with
— source positivemoney.org | Simon Youel | May 27, 2021