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Post by Deleted on Feb 26, 2015 15:18:20 GMT
I was wondering what the possible reasons for large sums to be transacted at low interest levels and then sold on at a small premium to others using fancy bots and one that came to mind was money laundering. Makes you think, I wonder if FC have yet?? I wonder if the FSA have thought about it as well?  |
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bloodycat
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Post by bloodycat on Feb 26, 2015 16:48:54 GMT
Unlikely to be an effective way of money laundering.
Provided they can sell them on quick enough then a tiny percentage gain on a large value of transactions is probably better than just having the money sitting there waiting for a suitable high yielding opportunity to come up, though I can't see it being an effective long term strategy, especially with the lower rate loans.
Whilst there are new, inexperienced people coming in who don't understand risk there will be a market for the lower rate loans as 6.4% return looks attractive compared to the pittance available in interest on standard retail savings accounts, though since autobid won't go for anything with a premium I don't quite see how this would work well.
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bloodycat
Member of DD Central
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Post by bloodycat on Feb 26, 2015 18:06:22 GMT
On my drive home I decided that perhaps another possible explanation is manipulation of the interest rated ownward in favour of the borrower.
As with most theories on the strange behaviours of some of the large bidders at first sight it doesn't appear to be an ethical , efficient or reliable tactic but over the life of a longer loan even a small decrease in average rate can make a significant difference to the overall cost to the borrower.
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Post by GSV3MIaC on Feb 26, 2015 19:33:50 GMT
Not really .. even 1% on £100k only amounts to £10 a week, average. Not going to keep them in postage stamps, is it.
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