registerme
Member of DD Central
Posts: 6,624 
Likes: 6,437
|
Post by registerme on Feb 10, 2016 7:29:53 GMT
Some interesting commentary on Radio 4 this morning, about p2p, where he mentioned:- Concern about automated credit checking / scoring. Platform advertising. People being overweight the sector. Apparently the P2PFA will respond after 0830. I'll try to find a link when I get up  . |
|
james
Posts: 2,205
Likes: 955
|
Post by james on Feb 10, 2016 7:39:40 GMT
How about " The losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses" (Link goes to the BBC report) for a quote? Not the most positive of opinions particularly given that most loans have terms no longer than five years. The broadcast was at about 06:18 just after discussion of the FTSE and what he actually said was worse: " I strongly suspect that the losses on peer-to-peer lending [breathe in] which will emerge within the next five to ten years [breathe in] will make the worst bankers look like absolute lending geniuses. You [emphatic]cannot lend money[end emphatic] to small and medium enterprises in particular [breathe in] without somebody going and doing good credit underwriting. This idea that you can just automate that onto a platform I think it has a role to play but I think it will end up producing big losses." (my bold) Make me wonder which platforms are doing automated credit ranking for loans to small and medium businesses, without proper human underwriting. Note that the fuller quote that I transcribed from the broadcast is not about P2P in general so much as about automated credit scoring platforms rather than human underwriting. The quoting choice by the BBC seems to have radically altered the meaning of what he said. |
|
registerme
Member of DD Central
Posts: 6,624
Likes: 6,437
|
Post by registerme on Feb 10, 2016 8:14:16 GMT
Yeah, that quote struck me as perhaps a little over-egged, it being a prediction rather than a concern. Also I wasn't sure whether he was limiting himself to discussing the industry in the UK, or more widely to include Europe and the US (and China) etc.
Still, in the abstract, until we've seen the industry go through an interest rate cycle / business cycle he's right to be thinking about how good the credit models are, particularly of the "automated lots of diversification to lots of borrowers" type plays.
|
|
|
|
Post by jackpease on Feb 10, 2016 8:17:08 GMT
Well nobody can now say they weren't warned!
I think he's unfair to group all p2p lenders together - some active on this board are very clearly trying to create a business that can survive a wider financial crisis.
But others - i can see his point - I watch with incredulity that people are up all night/writing bots/having multiple windows open etc etc chasing extra parts on high yield platforms - I get the impression these guys have not thought about platform risk, the need to diversify across platforms and the need to keep p2p as a small part of their total portfolio.
Jack P
|
|
duck
Member of DD Central
Posts: 2,882
Likes: 6,974
|
Post by duck on Feb 10, 2016 8:21:18 GMT
Well Lord Turner is on the board of OakNorth www.oaknorth.com/home so a conspiracy theorist would say ..... |
|
|
|
Post by oldnick on Feb 10, 2016 8:27:20 GMT
Well Lord Turner is on the board of OakNorth www.oaknorth.com/home so a conspiracy theorist would say ..... 1.5% 30 month term. Yummy.
|
|
pikestaff
Member of DD Central
Posts: 2,188
Likes: 1,546
|
Post by pikestaff on Feb 10, 2016 8:29:17 GMT
BBC report of the interview here: www.bbc.co.uk/news/business-35537714 . They choose to headline with his view that without radical policies, the UK economy could be stuck with low interest rates "almost indefinitely", and "interest rates in the UK may not go up beyond 2% by 2020". I agree with his view on interest rates. I also think he's partly right on p2p. There will be years and sectors where losses are heavy. Property losses in particular tend to come all at once. Lenders should factor this into their calcuations and should not in my view expect a long-run average return much in excess of 6-7% on any platform. In the benign conditions of the last few years, most lenders will have beaten this but it can't last forever. Edit: Crossed with several of the above posts. I'm not sure that I share his concern about automated credit score based lending to SMEs. It depends on the size of the enterprise. I think it is the future for loans to micro enterprises but for businesses of any size there still needs to be a human being involved, if only to eyeball the borrower. |
|
james
Posts: 2,205
Likes: 955
|
Post by james on Feb 10, 2016 8:55:45 GMT
I've provided the following accuracy feedback to the BBC about their story: 'P2P quote from Adair Turner grossly misrepresented what he was addressing. My transcript from the broadcast at about 06:18 on BBC4 is: "I strongly suspect that the losses on peer-to-peer lending [breathe in] which will emerge within the next five to ten years [breathe in] will make the worst bankers look like absolute lending geniuses. You [emphatic]cannot lend money[end emphatic] to small and medium enterprises in particular [breathe in] without somebody going and doing good credit underwriting. This idea that you can just automate that onto a platform I think it has a role to play but I think it will end up producing big losses." The BBC quote used was "The losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses". This dramatically shifts the emphasis to all of P2P rather than the use of automated instead of full credit underwriting in P2P platforms lending to small and medium businesses that the more full quote shows he was discussing.' |
|
|
|
Post by queenvictoria on Feb 10, 2016 9:06:30 GMT
Very robust response by Christine Farnish, CEO of the P2P industry body, just after 8.30 on same programme. She said that PSP lenders followed the same, if not even more rigorous, procedures than the banks when assessing borrowers. Her tone was a lot less inflammatory than Adair Turner's - what is his agenda I wonder.
|
|
jo
Member of DD Central
dead
Posts: 741
Likes: 498
|
Post by jo on Feb 10, 2016 9:07:48 GMT
Hate to attack the messenger rather than the message but Turner represents the financial status quo which hates 'disruptive' interlopers.
Witness how the FT has been 'down' on P2P for the past 8 years (and bitcoin and Uber, AirBnB etc etc).
|
|
adrianc
Member of DD Central
Posts: 10,037
Likes: 5,154
Member is Online
|
Post by adrianc on Feb 10, 2016 9:17:08 GMT
I've provided the following accuracy feedback to the BBC about their story: 'P2P quote from Adair Turner grossly misrepresented what he was addressing. My transcript from the broadcast at about 06:18 on BBC4 is: "I strongly suspect that the losses on peer-to-peer lending [breathe in] which will emerge within the next five to ten years [breathe in] will make the worst bankers look like absolute lending geniuses... The BBC quote used was "The losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses". This dramatically shifts the emphasis... Seems to be pretty much what he said...
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Feb 10, 2016 9:26:43 GMT
Please don't deliberately misrepresent what I wrote by removing the relevant portion of the transcript to make it look as though my objection to the BBC also did what the BBC did. Kindly quote the whole of what he said, not repeat the selective misrepresentative quoting done by the BBC but now misrepresenting what I wrote as well as what Lord Turner said.
|
|
|
|
Post by carol167 on Feb 10, 2016 9:57:43 GMT
Lord Turner......"Former City regulator"
I sure hope he wasn't in charge of regulating the banks then.....
Cause that turned out oh so well!
|
|
markdirac
Member of DD Central
Posts: 128
Likes: 51
|
Post by markdirac on Feb 10, 2016 10:20:40 GMT
The quoting choice by the BBC seems to have radically altered the meaning of what he said. The BCC repeatedly claim that the interview was conducted on Radio 5's Wake Up To Money. And so does this presentation of, I guess, a BBC press release: uk.businessinsider.com/ex-fsa-chief-adair-turner-fintech-p2p-lending-interest-rates-2016-2?r=DE&IR=TYet I have listened to the entire edition of Wake Up To Money (groan) from this morning (on the iPlayer Radio app) and Turner never once mentions P2P! Has anyone heard the interview, other than the snippet repeated on Radio 4's Today programme?
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Feb 10, 2016 10:29:18 GMT
You're not the only one who listened to the Radio 5 program as well and found nothing about P2P. The Radio 4 presenter mentioned that he carried out the interview with Lord Turner yesterday so it appears that each program selected portions of that interview to use. I've seen no mention of a place where the whole interview is available.
|
|
.
