About those evil, evil bankers
Discussion
Gotta love the way the bankers and their friends and relations on here appear to be saying,
1. We never did anything wrong.
2. No money has been lost.
The same arrogance continues to ooze from their every pore.
Let's start with a couple of basics about the business model - strictly IMHO of course,
A. When entering "secured lending" it's a good idea to lend a max of say 90% of the recoverable value of the asset.
B. When lending £5,000 to someone on their credit card it's a good idea to check out what other indebtedness they are already carrying. Oh yes, and whether they've got enough reliable income to service the debt.
C. Bank branches on the high street are primarily for banking. The money side isn't just a loss-leader for flogging over-priced pensions, inadequate insurance and a load of other tat.
1. We never did anything wrong.
2. No money has been lost.
The same arrogance continues to ooze from their every pore.
Let's start with a couple of basics about the business model - strictly IMHO of course,
A. When entering "secured lending" it's a good idea to lend a max of say 90% of the recoverable value of the asset.
B. When lending £5,000 to someone on their credit card it's a good idea to check out what other indebtedness they are already carrying. Oh yes, and whether they've got enough reliable income to service the debt.
C. Bank branches on the high street are primarily for banking. The money side isn't just a loss-leader for flogging over-priced pensions, inadequate insurance and a load of other tat.
paulrockliffe said:
DonkeyApple said:
paulrockliffe said:
It raises the question; "Why can a bank lend money they don't have, yet I cannot?"
Thoughts?
Cheers.
And here is the answer:Thoughts?
Cheers.
1. Go to your bank and get an unsecured loan for as much as you can.
2. Lend it out at a higher rate via Zoopla of even to a derivative trader or property developer etc etc
Now, ideally you want someone else to carry out Step 1 for you .
Well a lot came from the BoE of course, loads of cheap funds, guarantee's, QE, etc.
I don't disagree the government was responsible for a lot of the mess. But you cant tell me banks overall were blameless.
Plenty of banks around the world that didn't get into deep trouble and plenty that did.
Creative destruction is good.
You are right, the government doesn't want its voters to get hurt. Especially the brain dead ones, though pity they weren't! Things may come back into balance faster.
I don't think anyone has all the answers, but things evolve over time. Going back to the status quo in my books is a fail. Time to evolve and move on to something new. My 2p.
I don't disagree the government was responsible for a lot of the mess. But you cant tell me banks overall were blameless.
Plenty of banks around the world that didn't get into deep trouble and plenty that did.
Creative destruction is good.
You are right, the government doesn't want its voters to get hurt. Especially the brain dead ones, though pity they weren't! Things may come back into balance faster.
I don't think anyone has all the answers, but things evolve over time. Going back to the status quo in my books is a fail. Time to evolve and move on to something new. My 2p.
anonymous said:
[redacted]
He didn't last much longer in that northern monkey operation to be fair. Should have stayed a BS. They most definitely brought a knife to a gunfight.Interesting how most of the UK failed banks were either old building societies that were never equipped to be banks or northern bedrock institutions which suddenly forgot their core frugal tennets.
I blame Northerners.
anonymous said:
[redacted]
Lending money on reasonable terms with a prudent assessment of the risks.Borrowing money on reasonable terms with a prudent assessment of the risks.
Making sure the lending part and the borrowing part fit together in a sensible fashion.
Compare and contrast (i) equity investment, and (ii) gambling.
Ozzie Osmond said:
anonymous said:
[redacted]
Lending money on reasonable terms with a prudent assessment of the risks.Borrowing money on reasonable terms with a prudent assessment of the risks.
Making sure the lending part and the borrowing part fit together in a sensible fashion.
Compare and contrast (i) equity investment, and (ii) gambling.
ringram said:
I don't disagree the government was responsible for a lot of the mess. But you cant tell me banks overall were blameless
I don't think anyone is saying that, lots of us just get annoyed with the whole situation is grossly oversimplified as being "the evil bankers fault".You have three players in this game.
Government/FSA - Regulation
Banks - Supply
Population - Demand
The oversimplification of the above which ends up at "evil bankers ruined the economy" is what (as it appears to me) gets the goat of many people here on PH.
Yes, there was oodles of cheap money on offer, but there a) has to be a regulatory structure in place which allows that to take place and b)a customer base willing to lap it up.
Ozzie Osmond said:
DonkeyApple said:
Prudent assesment of risk = massive rise in costs, ergo no net gain
See my comment above re. arrogance.If you assess every opportunity prudently then you need employ vhastly more numbers of highly qualified risk assesors. The clients will pay for these and so costs will spiral and business will migrate to cheaper banks.
Risk has been run on as sophisticated as possible best guess scenario in order for a company to remain profitable.
It's all a trade off of risk v reward.
Very obviously, selling on packaged debt to entities with small balance sheets who then borrowed the money need to buy the asset off the very institution selling it was were the system turned itself into one massive clustref
k of identically programmed MBA students who in reality were mostly clueless.As a slight aside I cant understand how some so called "business" owners think its their right to a bank loan. Some of their businesses sound absolutely crap. Zero cash flow and basically zero profit, they only exist because of bank credit. Then they complain when the cost of credit increases or they cant extend their overdraft and blame the bank for the failure of their st business.
So in that camp I think banks need to be more discerning about where they throw money. For the bank they see it as a steady income. They don't seem to care that the behind that income stream is a failure waiting to happen. They shouldn't be there. Though I see that certain types in the government seem to think they should be loaning to these deferred failures.
That failure needs to be shot to let someone more sensible to come along and kick the corpse aside. Should be the same rule for everyone. To much ghay capitalism around the place recently.
t business.So in that camp I think banks need to be more discerning about where they throw money. For the bank they see it as a steady income. They don't seem to care that the behind that income stream is a failure waiting to happen. They shouldn't be there. Though I see that certain types in the government seem to think they should be loaning to these deferred failures.
That failure needs to be shot to let someone more sensible to come along and kick the corpse aside. Should be the same rule for everyone. To much ghay capitalism around the place recently.
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