ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 14, 2016 21:27:14 GMT
registerme : not I think actually as true as the statement suggests. The fscs paid out for those icelandic banks that were covered e.g. Kaupthing Edge. But it was the uk government that rescued savers in the non-FSCS covered IceSave - I'm pretty sure. And that is a major distinction. Teh original comment from crabbygit has a small element of truth: as I recall IceSave (or the ultimate G..... entity) was meant to have some cover under I think a Danish mutual cover arrangement for retail deposits: which I am pretty sure they found a 'reason' to walk away from/not honour). All done from memory, caveated may be subject to senility. Oh, and I had exposure to nearly all of those mentioned in both this post and the ones above. So apart from Northern Rock, B&B, Abbey, Kaupthing Edge.....what has the FSCS ever done for us ? EDIT: It may have only be NR & B&B & KE that had FSCS payments. Abbey was taken over by Santander as I recall and I think it was taken over as a going concern. All a bit hazy now. Not entirely true. Icesave did have FSCS protection Icesave was protected by the Icelandic scheme with top up protection from the FSCS over & above the level offer by Iceland (E20k). The FSCS did pay out for Icesave but only because the government lent it the money (at interest) to do so (leading to higher fees for memebers). With Iceland bust, the UK govt undertook for the FSCS to cover the whole amount. The Icelandic govt didnt cough up having failed to persuade the Icelanders to honour their commitments in two referenda but the Supreme Court subsequently adjudicated that the Landisbanki administrators would have to sell assets to repay the FSCS, finaly completed in Jan this year, and the FSCS repaid the govt loans. Similiar recoveries have been made in relation to Edge. www.fscs.org.uk/industry/media-news/2008/october/fscs-gears-up-to-assist-icesaves-uk-branch-customers/www.fscs.org.uk/news/2016/january/fscs-receives-final-icesave-payment/
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mikes1531
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Post by mikes1531 on Apr 17, 2016 18:03:23 GMT
We can also manage the risk by reducing the global cap which will shrink the account with natural attrition, particularly the swept funds. chris : Can you please clarify what would happen if AC were to shrink the cap to a level below the amount in the QAA at the time of the reduction? I presume that any new funds headed for the QAA would end up queued, but what about the funds already in the QAA? Would they be OK until natural withdrawals reduced the amount in the QAA to the new cap level? Or would some invested funds be forced out? If the latter, how would funds be selected for ejection? I think I'll believe that MLIA has a long term future for me when and if AC can explain how it make them more money than the other accounts. We make the same fee income on all loans regardless of which investment account, MLIA included. The only way we can make more money from the other accounts than the MLIA is when their respective provision funds are above a certain threshold and AC are able to reclaim the excess. QAA only makes AC additional money if the provision fund is overflowing and we claim that surplus. chris: Please correct me if I'm wrong, but ISTM that there is an additional way that the QAA can make money for AC that hasn't been mentioned... ...to the extent that AC have been able to use the QAA to replace some underwriters. AC have to pay underwriters fees for their services, and if the QAA can provide those services to AC instead then AC ought to be able to save some/most of the underwriting fees that they otherwise would have to pay out. I haven't a clue what level of fees underwriters are typically paid, but it would not surprise me in the least if the fees savings were to be a significant contributor to AC's bottom line. The above is not a complaint -- it's a statement of admiration. This advantage of the QAA for AC is one of the real strokes of genius of the QAA, and I congratulate whoever thought of the idea in the first place and those who developed it into reality. It's a brilliant tool for both AC and its investors.
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mikes1531
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Post by mikes1531 on Apr 17, 2016 18:22:21 GMT
.... QAA's still brilliant for MLIA investors. Just don't understand this view. The QAA is a competitor for loan parts, and an important seller at times. In other sectors this would be called monopolistic and monopsonistic behaviour, and undesirable as it leads to market manipulation. You might think you're getting 3.75 or 4.25 per cent; I think you're losing 3 -8 per cent in return for some liquidity. Fine, if you all you want is liquidity, but a distorting factor for those whose focus is the MLIA. chielamangus: As far as I'm concerned, the brilliance of the QAA for MLIA investors lies in its ability to allow them to make a return on funds awaiting investment. The drag on overall returns caused when a proportion of investors' accounts is awaiting investment and earning nothing is significant, and the introduction of the QAA and its 'swept funds' feature significantly reduced that drag. Furthermore, as the average return on MLIA investments appears to be headed for single digits, the drag caused by idle funds earning at the QAA rate will be even less than it is now. I accept that giving the QAA priority for SM sales is a negative for MLIA investors, but I'm hopeful that AC's investor recruitment efforts will bring new money to the platform, reducing the amount of parts for sale on the SM, and hopefully reducing the need for the QAA's priority. If AC can progress to the point where the QAA is granted a proportion of SM sales -- rather than the absolute priority it seems to have had until now -- then MLIA investors might get to the point where they can sell parts without difficulty and won't even notice the QAA's priority.
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Post by chris on Apr 17, 2016 18:51:41 GMT
We can also manage the risk by reducing the global cap which will shrink the account with natural attrition, particularly the swept funds. chris : Can you please clarify what would happen if AC were to shrink the cap to a level below the amount in the QAA at the time of the reduction? I presume that any new funds headed for the QAA would end up queued, but what about the funds already in the QAA? Would they be OK until natural withdrawals reduced the amount in the QAA to the new cap level? Or would some invested funds be forced out? If the latter, how would funds be selected for ejection? We make the same fee income on all loans regardless of which investment account, MLIA included. The only way we can make more money from the other accounts than the MLIA is when their respective provision funds are above a certain threshold and AC are able to reclaim the excess. QAA only makes AC additional money if the provision fund is overflowing and we claim that surplus. chris : Please correct me if I'm wrong, but ISTM that there is an additional way that the QAA can make money for AC that hasn't been mentioned... ...to the extent that AC have been able to use the QAA to replace some underwriters. AC have to pay underwriters fees for their services, and if the QAA can provide those services to AC instead then AC ought to be able to save some/most of the underwriting fees that they otherwise would have to pay out. I haven't a clue what level of fees underwriters are typically paid, but it would not surprise me in the least if the fees savings were to be a significant contributor to AC's bottom line. The above is not a complaint -- it's a statement of admiration. This advantage of the QAA for AC is one of the real strokes of genius of the QAA, and I congratulate whoever thought of the idea in the first place and those who developed it into reality. It's a brilliant tool for both AC and its investors. On your first point as currently coded the system would queue new funds preventing them from entering the QAA until such time as the total invested had fallen below the cap. Existing investments would remain in place and we would rely on natural attrition / churn to reduce the total back under the cap. On your second point at the moment AC's fees remain broadly the same across all forms of funding, although some forms of funding can reduce borrower rates and make us more competitive in the marketplace.
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mikes1531
Member of DD Central
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Post by mikes1531 on Apr 17, 2016 19:59:12 GMT
chris : Please correct me if I'm wrong, but ISTM that there is an additional way that the QAA can make money for AC that hasn't been mentioned... ...to the extent that AC have been able to use the QAA to replace some underwriters. AC have to pay underwriters fees for their services, and if the QAA can provide those services to AC instead then AC ought to be able to save some/most of the underwriting fees that they otherwise would have to pay out. I haven't a clue what level of fees underwriters are typically paid, but it would not surprise me in the least if the fees savings were to be a significant contributor to AC's bottom line. The above is not a complaint -- it's a statement of admiration. This advantage of the QAA for AC is one of the real strokes of genius of the QAA, and I congratulate whoever thought of the idea in the first place and those who developed it into reality. It's a brilliant tool for both AC and its investors. ... at the moment AC's fees remain broadly the same across all forms of funding, although some forms of funding can reduce borrower rates and make us more competitive in the marketplace. chris: Thanks for your input. You said earlier "We make the same fee income on all loans regardless of which investment account, MLIA included." I accept, and have no problem with, that. But I wasn't trying to suggest that AC might be charging pseudo-underwriter's fees when the QAA did underwriting. If I gave that impression, please accept my apologies. What I was trying to suggest was that AC could improve its profitability by avoiding paying others for underwriting. I hadn't considered the possibility you described -- that AC could use the fee savings to offer borrowers a better deal, and become more competitive as a result. That's certainly an alternative, and a good benefit of the QAA to AC. As I said before, I think the QAA is a brilliant tool for AC and I congratulate AC for having created it. Keep up the good work!
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Post by chris on Apr 19, 2016 6:49:05 GMT
What I was trying to suggest was that AC could improve its profitability by avoiding paying others for underwriting. I hadn't considered the possibility you described -- that AC could use the fee savings to offer borrowers a better deal, and become more competitive as a result. That's certainly an alternative, and a good benefit of the QAA to AC. As I said before, I think the QAA is a brilliant tool for AC and I congratulate AC for having created it. Keep up the good work! We have more innovations in the pipeline for the next few weeks
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