The financial crash I'll give you partially, but really a lot of it was the result of policy decisions impacting the whole system. The global recession in the late 90s/early 2000s brought about by the east Asian economic crisis, .com bubble and the introduction of the euro led to job losses and a housing market slowdown across many countries but particularly the US which caused the US policymakers to put in a raft of stimulus measures in an effort to create a "soft landing and takeoff" effect. Despite the UK being relatively unaffected, the Blair led government was in absolute lockstep with their US counterparts and mirrored US policy, including a programme of deregulation and economic stimulation (remember "it's the end of boom and bust"). Banks were encouraged to become less conservative and make credit more freely available to boost bottom end supply. The banks reacted by securitising these riskier loans to try and maintain a balanced asset sheet, but as these practises increased, the capital markets became saturated by higher-risk assets, leading to a loss of confidence, which became a crisis in confidence after the collapse of Lehman Bros and banks stopped trading with each other. This led to what was described as "the credit crunch" - the drying up of bank credit. That led to the failure of businesses that rely on bank credit for cash flow and the wider "financial crash".
On your point about banks moving money between each other - you need to understand why this happens. Happens kind of for two main reasons:
- Firstly, every bank holds accounts with other banks. When you make a payment to another person or business, your bank moves the money to its account held with the bank with which the other person/business banks with. It sends a message to the other bank asking it to credit those funds to the relevant account. In the UK we have automated clearance systems now like Faster Payments but internationally it's still very manual and clunky behind the scenes.
- Secondly you have wholesale banking or liquidity management. Banks are required to hold regulatory capital, which includes a certain amount of liquid assets that can be monetised as cash quickly to meet spikes in demand. By demand, I mean customers wanting to withdraw their money. Banks take deposits from customers and use these funds to lend to other customers. But they have to maintain capital reserves in liquid assets as I've said. Banks trade assets with each other for the purpose of managing liquidity - so NatWest might be experiencing a spike in demand of customers withdrawing, which is diminishing it's liquidity. So it might approach the market and sell some of its government or bank bonds, say to Barclays, in order to maintain its positions.
I mean ultimately you've got to think about what a bank is - when you say the EU was threatening to increase tax on these transactions - they were threatening to tax YOUR money.
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