chris1200
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Post by chris1200 on Aug 12, 2020 10:32:15 GMT
But I'm confused, how can you argue both of these points: " the queuing system actually reduces the overall chance of a capital haircut" and " scrapping RYIs altogether might improve things even further". Although, aside from the inconsistency point, I actually don't think the RYI/queueing system is relevant at all; it's the performance of the loanbook that matters. There's no inconsistency (contradiction) in what I wrote. The former already provides and the latter if implemented would improve financial stability for the platform. *Tries to remember back to two days ago* I think my point was that the 'queueing system' and 'RYIs' are the same thing. So to say, on the one hand, that it reduces the chance of a haircut, and, on the other, that scrapping it would reduce the chance even further didn't make much sense to me...? But I also stand by my subsequent point that none of this directly relates to the chances of a capital haircut, which is dictated by how the loanbook performs. Who that haircut applies to (should it occur) would indeed change depending on who is able to get out before it happens; but not the chances of it happening at all.
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bt
Sir Bufton Tufton, Jean Paul Sartre Zippy, Bungle, Jeffrey Archer Andre Previn and the LSO Hello
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Post by bt on Aug 12, 2020 11:20:19 GMT
There's no inconsistency (contradiction) in what I wrote. The former already provides and the latter if implemented would improve financial stability for the platform. *Tries to remember back to two days ago* I think my point was that the 'queueing system' and 'RYIs' are the same thing. So to say, on the one hand, that it reduces the chance of a haircut, and, on the other, that scrapping it would reduce the chance even further didn't make much sense to me...? But I also stand by my subsequent point that none of this directly relates to the chances of a capital haircut, which is dictated by how the loanbook performs. Who that haircut applies to (should it occur) would indeed change depending on who is able to get out before it happens; but not the chances of it happening at all. So it would be fairer to apply a haircut sooner rather than later ? 
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chris1200
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Post by chris1200 on Aug 12, 2020 11:26:41 GMT
*Tries to remember back to two days ago* I think my point was that the 'queueing system' and 'RYIs' are the same thing. So to say, on the one hand, that it reduces the chance of a haircut, and, on the other, that scrapping it would reduce the chance even further didn't make much sense to me...? But I also stand by my subsequent point that none of this directly relates to the chances of a capital haircut, which is dictated by how the loanbook performs. Who that haircut applies to (should it occur) would indeed change depending on who is able to get out before it happens; but not the chances of it happening at all. So it would be fairer to apply a haircut sooner rather than later ? Well, you can't really apply a haircut unless you think it's fairly certain one is/will be needed, I suppose. As far as I'm aware, RS operates on the basis that as soon as it's deemed that the provision fund won't be able to cover future defaults - based on their projections - then that's when all this kicks in. But not before then.
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bt
Sir Bufton Tufton, Jean Paul Sartre Zippy, Bungle, Jeffrey Archer Andre Previn and the LSO Hello
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Post by bt on Aug 12, 2020 11:34:40 GMT
So it would be fairer to apply a haircut sooner rather than later ? Well, you can't really apply a haircut unless you think it's fairly certain one is/will be needed, I suppose. As far as I'm aware, RS operates on the basis that as soon as it's deemed that the provision fund won't be able to cover future defaults - based on their projections - then that's when all this kicks in. But not before then. I know, I was being facetious! But still, a haircut late in the day will disproportionately affect those late in the queue, and especially those who have not worked out how to get their repayments back into the bank. But I agree it should only be done when necessary.
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chris1200
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Post by chris1200 on Aug 12, 2020 11:40:27 GMT
Well, you can't really apply a haircut unless you think it's fairly certain one is/will be needed, I suppose. As far as I'm aware, RS operates on the basis that as soon as it's deemed that the provision fund won't be able to cover future defaults - based on their projections - then that's when all this kicks in. But not before then. I know, I was being facetious! But still, a haircut late in the day will disproportionately affect those late in the queue, and especially those who have not worked out how to get their repayments back into the bank. But I agree it should only be done when necessary. Indeed - although, to some extent, this is always how this model of P2P has worked. When trouble hits, even if the underlying loanbook goes bad, as long as you 'get out' before they declare whatever they want to call it, you're safe. Of course, the speed to 'get out' in this case has been taken to extremes!!
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aju
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Post by aju on Aug 12, 2020 13:11:41 GMT
I know, I was being facetious! But still, a haircut late in the day will disproportionately affect those late in the queue, and especially those who have not worked out how to get their repayments back into the bank. But I agree it should only be done when necessary. Indeed - although, to some extent, this is always how this model of P2P has worked. When trouble hits, even if the underlying loanbook goes bad, as long as you 'get out' before they declare whatever they want to call it, you're safe. Of course, the speed to 'get out' in this case has been taken to extremes!! Yeah I agree here it is a sad fact that the latecomers to the table may have to take the hit, we are way down the pecking order of the Access product ourselves but to be honest we only started to get odd loans in there when it was becoming a lottery at the end of the week before pandemic effects hit. One could easily get 6% and above some weeks when I was gaming the system that even with the 50% interest cut they are still good earners to a certain degree. As a result we only have limited funds in those accounts thankfully. The bulk of our money in 5Y returns is coming close to repaying now we are getting nearer the front, the one year will take a longer if its even worth it as it will be at most 10/11 months anyway for us. We are in Zopa in a considerably bigger way - since near the beginning of it, but even with their sharing queue rather than the FIFO it was when we started selling we are almost nearly sold out of everything that can be sold. Its not been too painful over there, except for 4%+ Market Rate Adjustments, but it had to be done even now our defaults are mounting and taking over the returns monthly quite regularly since we sold off most - excpt the still SG covered stuff. I guess its a knife edge the RS PF won't last for ever and with the wind down it will be closer to the edge as the months roll on if it survives at all. We all will find out soon enough I guess.... 
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