sam i am
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Post by sam i am on Jan 13, 2016 16:07:27 GMT
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Post by bracknellboy on Jan 13, 2016 16:18:40 GMT
He's put the same post with the same title in at least three sub-forums. I've reported them..... true sill a valid question though The question is valid: the mode of posting the same thought in 4 sub boards is not. The OP has been PM'd with request to advise of their intent.
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alender
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Post by alender on Jan 13, 2016 16:35:24 GMT
As far as I know in the event of a crash you will get some or all of your money back as you do not lend to RS but to the borrowers.
However in this event if you are in the 1 month or 1 year market you will probably be locked in for a long period.
The danger with P2P is that they have never been tested in bad market conditions and have only existed while the market is benign. It amazes me some of the low rates people accept giving their money to an industry with such a short track record and when borrowers offers are low (which is a lot of the time) I do not think the interest rates reflect the dangers.
However I do think RS have been careful to whom they lend but we will know more when there is a crisis in the Financial Markets.
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adrianc
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Post by adrianc on Jan 13, 2016 16:42:00 GMT
I'd suggest consolidating the threads into one, in the general board.
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am
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Post by am on Jan 13, 2016 17:31:31 GMT
How many boards have you posted this to?
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Post by Deleted on Jan 13, 2016 17:53:40 GMT
I have worked in various financial markets since 1981. In every year a number of people have proposed that there will be a crash this year. The question needs to be less nebulus. Do we mean a property price crash for instance? How much is a crash, 18%? 40%? 90%?
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blender
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Post by blender on Jan 13, 2016 18:14:14 GMT
I have worked in various financial markets since 1981. In every year a number of people have proposed that there will be a crash this year. The question needs to be less nebulus. Do we mean a property price crash for instance? How much is a crash, 18%? 40%? 90%? I have listened to the news now and they seems to be talking about the effects of a sustained low oil price. No mention of property. I suppose we could add the Chinese pause in growth. I see no threat to Funding Circle there. The North Sea and fracking businesses and oil companies and renewables/low carbon would suffer. But otherwise a low oil price would help stimulate growth based on consumer spending (the only sort we can do here) and business costs would reduce - helping investment, reducing defaults. The demand for business loans might reduce but not enough to damage FC. So let's identify the threat to FC, if there is one, before we judge their response.
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Post by westonkevRS on Jan 13, 2016 18:15:07 GMT
The press is full of reports forecasting a crash to at least match that of 2008. RateSetter was not in existence in 2008. How can they assure us that they are in a position to survive such a crash? Is this a serious post? Of course RateSetter cannot. Principally because we do not know the future and our ability to survive future economic scenarios, and it would be criminally wrong to even to try provide such assurance. This would be true of any business. Kevin.
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Post by bracknellboy on Jan 13, 2016 18:27:43 GMT
He's put the same post with the same title in at least three sub-forums. I've reported them..... I have now amalgamated these into this single thread under General Discussion. oldgrumpy 's early posts look particularly more amusing this way.
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jw01
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Post by jw01 on Jan 13, 2016 18:55:51 GMT
Let me clarify.
I am a newbie thinking of putting my money into four P2Ps.
There are plenty of forecasts of a crash this year and I therefore wanted some indication of what these companies were doing to prepare for one.
The key word in my post was "how". Obviously it is not possible to forecast the future, but what I was hoping was that representatives of these companies would state how they minimise their exposure to external shocks.
Perhaps I should just go directly to each company.
I note that some people thought it was a valid question and a few produced useful replies.
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adrianc
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Post by adrianc on Jan 13, 2016 19:46:24 GMT
Let me clarify. I am a newbie thinking of putting my money into four P2Ps. There are plenty of forecasts of a crash this year and I therefore wanted some indication of what these companies were doing to prepare for one. The key word in my post was "how". Obviously it is not possible to forecast the future, but what I was hoping was that representatives of these companies would state how they minimise their exposure to external shocks. Perhaps I should just go directly to each company. I note that some people thought it was a valid question and a few produced useful replies. All of the sites will have done stress-testing. It'll certainly be part of the FCA regulatory paperwork they're all doing at the moment, as well as just basic common sense. Most of them will have published stuff about their stress-testing, to some extent or another. www.fundingcircle.com/blog/2014/12/digging-data-stress-testing-funding-circle-loanbook/savingstream.co.uk/how-it-works (near bottom) www.ratesetter.com/blog/article/ratesetter-2015-lender-drinks (just above half way down) I'm not sure which the fourth platform you were asking about was, but I'll bet they publish something similar.
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registerme
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Post by registerme on Jan 13, 2016 19:48:28 GMT
Some random musings:-
1. If true p2p then lenders are not lending to the platforms themselves, but to the borrowers on the other side of the platform. That means there's no "bank run" risk, and no leverage risk (but these might be balanced by the lack of FSCS cover).
1a. Which is not to say that a wave of defaults could not have a negative impact on a particular platform's ongoing business, and possibly confidence in the wider industry.
2. The type of lending / product needs to be considered. Unsecured consumer lending is very different to asset backed lending which is different again to SME lending etc.
3. Consider what type of crash(es) could occur, how likely they are, and what the impact might be on the borrower you're lending to.
3a. Personally speaking I think a "global crash" is unlikely, but I think about risks associated with US / UK stock market corrections (both toppy); Brexit (and probably another referendum on Scottish independence); sudden oil price rises; China slump; deflation; more Eurozone trouble; unexpected inflationary pressure (QE unwinding?) leading to an interest rate spike; UK property market slump. Of course with any of them there will be some degree of associated collateral damage.
3b. Of that list I think none are likely, but the most likely are US / UK stock market corrections, Brexit leading to Scottish independence and more Eurozone trouble. They're not necessarily unconnected.
3c. If a significant crash of some kind does occur the biggest risk is likely to be that central banks and governments don't have much, if anything, left in their toolboxes to deal with it.
What could a platform do about any of this, assuming it had enough advance warning and acted correctly? I suspect that the answer is not much more than "tighten up on lending criteria".
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oldgrumpy
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Post by oldgrumpy on Jan 13, 2016 19:55:30 GMT
Let me clarify. I am a newbie thinking of putting my money into four P2Ps. There are plenty of forecasts of a crash this year and I therefore wanted some indication of what these companies were doing to prepare for one. The key word in my post was "how". Obviously it is not possible to forecast the future, but what I was hoping was that representatives of these companies would state how they minimise their exposure to external shocks. Perhaps I should just go directly to each company. I note that some people thought it was a valid question and a few produced useful replies. All of the sites will have done stress-testing. It'll certainly be part of the FCA regulatory paperwork they're all doing at the moment, as well as just basic common sense. Most of them will have published stuff about their stress-testing, to some extent or another. www.fundingcircle.com/blog/2014/12/digging-data-stress-testing-funding-circle-loanbook/savingstream.co.uk/how-it-works (near bottom) www.ratesetter.com/blog/article/ratesetter-2015-lender-drinks (just above half way down) I'm not sure which the fourth platform you were asking about was, but I'll bet they publish something similar. I think it was Thincats. Despite my tongue-in-cheek early responses, I did "like" the post of one respondent who conceded that the basic question was valid.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jan 13, 2016 21:38:30 GMT
IMHO Ratesetter is the least likely to collapse in a crash - moderate interest rates, moderate risk. Others have Bot-tastic headline rates and may be less safe. Jack P Ratesetter are dependent on their provision fund which is a massive £17m. The last time I checked it was all in one bank. Not sure if the govt will be able to bail out the banks again, so the provision fund might drop to £75,000.
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adrianc
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Post by adrianc on Jan 13, 2016 22:20:22 GMT
Some random musings:- 1. If true p2p then lenders are not lending to the platforms themselves, but to the borrowers on the other side of the platform. That means there's no "bank run" risk, and no leverage risk (but these might be balanced by the lack of FSCS cover). 2. The type of lending / product needs to be considered. Unsecured consumer lending is very different to asset backed lending which is different again to SME lending etc. If there is a mahoosive crash, then it's almost academic whether the loan is to the platform or the borrower. If the crash is big enough to take the big platforms down, then the defaults by borrowers will also be massive, whether they're individuals or SMEs. Asset-backing requires the asset that the loan is secured on to be worth something.
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