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Post by ruralres66 on Aug 11, 2016 5:42:21 GMT
The RS website clearly states loans in the Rolling will be made in the 6 month to 5 year market.
There is little info as to how much will be proportioned to the 5 year "market". Won't this simply be a RS business mechanism for reducing rates and increasing profits from more churn?
I would expect to see a clear graph or statement on the website to see what is going where within the Rolling market; the performance and rates being a far cry from the previous monthly where I was getting 3.8 regularly. I'm out from RS from now in this respect.
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Post by westonkevRS on Aug 11, 2016 6:18:53 GMT
The RS website clearly states loans in the Rolling will be made in the 6 month to 5 year market. There is little info as to how much will be proportioned to the 5 year "market". Won't this simply be a RS business mechanism for reducing rates and increasing profits from more churn? I would expect to see a clear graph or statement on the website to see what is going where within the Rolling market; the performance and rates being a far cry from the previous monthly where I was getting 3.8 regularly. I'm out from RS from now in this respect. Hi, The team in charge of the web site and comms do read this web site, but I'll also submit the idea. Although I don't think this will be shown as there are a lot of competitive forces at work in the use for the rolling money, in terms of where RateSetter needs to deploy this lower cost of funds to attain good quality borrowers. Transparency is fine if it helps lenders make an informed decision, but not if it's just a nice to know and could hurt our position to operate and stay financially stable. It's not my choice, but if it were I wouldn't publish the chart, sorry. But that's just the old secretive banker in me that P2P hasn't quite yet exorcised... Kevin. Kevin.
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Post by ruralres66 on Aug 11, 2016 7:40:25 GMT
See Financial Times article about p2p safety. The industry, critical press and regulators are all calling for informed lenders, lender's sophistication and the understood risks, so more transparency is needed. I won't reinvest without more information. Nor will many others.
I thought the game plan here was out with old banking style of operations and in with new...........Time to leave old habits behind me thinks Weston kev........ I need more transparency end of.š
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alender
Member of DD Central
Posts: 957 
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Post by alender on Aug 11, 2016 8:01:16 GMT
This is an important statistic for me as I have said before using short term funds for longer term investments is a dangerous game and it would be good to know how these funds are tied up.
I believe investors have a right to know how their money is used in order to determine the risks, in this case the risk of a lock in and how long the lock in is likely to last. If it could as said āhurt our position to operate and stay financially stableā then I would suggest that too much short term money is used for long term loans.
I have stopped using the Rolling market even when the rates were a lot higher because of this risk, the model is different for Banks mostly because of the FSCS protection.
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Post by propman on Aug 11, 2016 8:20:09 GMT
The RS website clearly states loans in the Rolling will be made in the 6 month to 5 year market. There is little info as to how much will be proportioned to the 5 year "market". The team in charge of the web site and comms do read this web site, but I'll also submit the idea. Although I don't think this will be shown as there are a lot of competitive forces at work in the use for the rolling money, in terms of where RateSetter needs to deploy this lower cost of funds to attain good quality borrowers. Transparency is fine if it helps lenders make an informed decision, but not if it's just a nice to know and could hurt our position to operate and stay financially stable . [see post below]
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Post by propman on Aug 11, 2016 9:51:46 GMT
IMHO a prudent lender should assume that the majority of their money is tied up for 5 years in the rolling market in the absence of better info. As a result, any announcement that a given proportion will not be used for this would provide comfort to investors in the market over the likely return over the first 3 years of a liquidity lock up and thereby may reduce the rates they are prepared to lend for.
You have made assurances before that only a small amount has been lent in the >2 year markets. The above suggests that it is used to decrease the rates for some borrowers. A the recent FCA papers have made clear, there is concern that P2P is opaque for investors and obscures the risks that they are taking and so may require more onerous regulation. I appreciate that other P2P providers are more obscure than RS, but as one of the founder members of the P2PFA and largest platforms, RS's approach is likely to have a larger influence on the FCA than smaller platforms. Similarly the maturity transformation of the rolling market is a major area of the FCA concern and so this is a sensitive area. I think we would all agree that it is inappropriate to withhold information on the nature of investments made from investors to preserve ignorance because it is more likely that they will then continue to invest.
- PM
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Post by ruralres66 on Aug 11, 2016 12:06:28 GMT
Peer-to-peer lenders in the UK have moved to reassure investors they are in safe hands amid calls for tougher regulation of the nascent sector.
"City grandee Lord Turner warns on peer-to-peer lending risks.
Former FSA chief says failure to check ability to repay loans could lead to big losses.
Stockholm-listed Trust Buddy, which had planned a significant expansion in the UK, processed Ā£10m of loans in the first half of 2015.
In February, the industry attracted the ire of former Financial Services Authority chief Lord Adair Turner, who predicted that āthe losses which will emerge from peer-to-peer lending over the next five to 10 years will make the worst bankers look like lending geniusesā.
'This prompted anger from the P2PFA. Christine Farnish, chair of the Peer-to-Peer Association and a former member of the Financial Services Authority, said Lord Turnerās comments were āunfairā and āill-informedā.
This is in contrast to the UK, where the focus was on making sure that consumer protections were proportionate to the risks.'
Comment from FT earlier this year;
"his aspect is not always grasped by investors. If i can lend for 5 years at 6% over the equivalent gilt the proportionately implies I am taking a lot of risk. The other problem is of course what goes on behind the scenes. How much communication is there? The FT recently highlighted poor communication at one lender. The involvement of professional lenders also raises question marks about cherry picking. This, I believe, is being regulated against but I (an investor) am unclear how effective this is. The operation of contingency funds by some providers gives some reassurance but the opaqueness makes assessment of adequacy difficult.
The P2P sector was a great idea and initially sold as retaking power from the big banks. Well banks are now involved! And as we saw with banks, unless properly regulated, where there's brass, there's muck. I am withdrawing as an investor. I understand risk but I dislike opaqueness. It is often forgotten that the FCA is geared to financial products that are 'sold'. P2P is not 'sold'. It may work well (it has for me so far) but if it goes wrong..."
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Post by dualinvestor on Aug 11, 2016 12:46:38 GMT
To be fair the comments were not really aimed solely at "retail" platforms but more towards property and pawn type loans. The post above could be put on any of the boards here and be equally pertinent.
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Post by Deleted on Aug 11, 2016 14:10:00 GMT
There have been plenty of comments pertinent to RS from the FCA as well.
The ones about maturity transformation and collective investments being the most obvious ones.
But tbf, all platforms will have their 'quirks' that are open to the regulatory arbitrage that concerns the FCA.
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