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Stornoway

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Everything posted by Stornoway

  1. No. The interest can be rolled up into the loan but would still go through the bank's p&l. It doesnt have to be paid in cash by the customer for the bank to be able to count the interest as income for p&l purposes. The accounting rules are different if the loan is classed as being impaired or in default but it looks like the router accounts are effectively created as new accts with interest roll up and therefore the interest could be taken to p&l.
  2. Noomill could I see the POC's - about to go into bat against a couple of DCAs.... Cheers
  3. Basle 2 was supposed to be about capital adequacy - ie. to ensure that banks were holding the right amount of capital for the type of lending they were doing.
  4. That's not actually correct. If they pursue the debtor they are better off. But if they write off the router then yes they will get tax relief but they will have paid more tax the previous year on the inflated interest they are charging so they are no better off overall. Unless of course the purpose is to manipulate profits from one year to the next but I think there must be easier ways for the banks to do so. I still think the plan must have been to pursue the higher amounts in the router accts.
  5. Any debt you have with RBS is a liabilility for you but its on the banks balance sheet as an asset. A deposit a/c you have with RBS is a liability on their balance sheet because they owe you the money.
  6. True Gezwee but remeber that the routers appear to have been around for a fair old while - long before the credit crunch and the collapse of the RBS share price. I'm off to bed now. Cheers
  7. Hi Gezwee I think the two points above are key; 1. they are only better off if they actually manage to recover the router balances 2. whilst they could use the routers to manipulate profits / balance sheet from 1 year to the next, this is simply massaging of their accounts and they are no better off overall unless they recover the full router balance. All the banks massage their accounts to a greater or lesser degree - one high street bank I know used to sell off some of its branches at the year end if it needed to boost profits. They also have a fair amount of free hand when it comes to attributing bad debts - they have a specific bad debt figure in the accts which is actual losses and a general bad debt figure which is their estimate of how much provisions they will need going forward. That's just two examples but there are many more. In the scale of the Royal Bank's balance sheet (hundreds of billions) these router accounts must be pretty small beer (but nonetheless very important to the individuals concerned) and any manipulation of their accounts would be small. I therefore get to the conclusion that they could only really be using the routers because they want to pursue borrowers for the higher balances.
  8. I dont think anyone understands the advantage of this practice .....
  9. The logic is a bit skew whiff here.... if the interest rate being charged is very high then the router accounts will increase in size and RBS have ; 1. more profits because the rolled up interest income will be posted to p&l 2. a larger balance sheet (more assets) because the customer loan will have increased by the amount of the rolled up interest 3. they also have a higher tax bill because they have to pay tax on their profits (i.e. tax on the rolled up interest) Therefore in bad times RBS could i suppose use the routers to manipulate profits to make it look like they are making more profits than they actually are. Conversely in good times they could write off the accounts but this would have the opposite impact to the above, ie. lower profits, smaller balance sheet, lower tax bill but all they are doing is writing off something that went through the previous years accounts - they are no better or worse off overall. I dont see how it really gives them much of an advantage its all swings and roundabouts. It all seems really fishy....
  10. I'm waiting on about £12k in refds which are stuck at court or with the FOS. I could really do with the cash but I guess we could be looking at waiting for at least another year. I do actually think that a charge is justifiable in principle (albeit maybe not in law!) and I dont have a problem with this being say £5 but any more is just ripping us off. The charging system just sums up for me how greedy the banks got in the last few years. I've paid off a lot of debt in the last couple of years but in the bad days I had a half dozen credit cards near their limit and if you miss payments one month then each would charge you £25 for the missed payment plus £25 for over limit and if you then have a couple of indiscretions on your current account you could be looking at another £100. It was just absolutely crazy and I really hope the banks get a proper "shoe-ing" now. On Bookworms point above this doesnt quite work in all situations because many shops have floor limits where debit card payments arent checked for funds - so the payment would go through automatically and could result in an O/D.
  11. This is why the whole unenforceable agreement argument is dubious in my opinion. You are correct - they wont write off the debt, they will continue to chase you and you will end up with a dodgy credit record. It will be a long hard fight for you.
  12. If there is no agreement then you are in a strong position and whilst they will no doubt hassle you for a while they ultimately cant take you to court and expect to win (they could still try and take to you to court but should lose). In this situation when contacted by a DCA I would write to them and tell them that the bank has informed you that there is no CCA and also send the DCA the standard CCA S78 letter asking for a copy of the agreement. The wll quickly cotton on that there is no prospect of getting money from you...... Personally I think unenforceable agreements are a minefield and you should be prepared for a long and hard fight.....
  13. Easyjet's recent 20% off sale was exactly the same - I had been monitoring the prices as I was about to book flights to tenerife. The advert says up to 20% off every seat every day every route but the price was exactly the same as the previous day. I phoned to complain and was told firstly that it is up to 20% so that could mean 0% and secondly because we are getting closer to the date of departure the price might have gone up by 20% then been reduced by 20%, Outrageous....
  14. I guess this will be for anti money laundering purposes but given that your chances of winning a tenner are about 54:1 it would appear to be a pretty stupid way to launder proceeds of crime.
  15. Its off topic but in reality these days the banks are paying rather a lot for their "stock" - pre credit crunch banks could borrow on the money markets at a margin of less than 0.1% and then lend the cash to the public at a margin 10 to 200 times higher (ie 1% for a mortgage loan or 20%+ for a credit card). These days most of the banks have to pay at least 2% to borrow on the money markets. That's why most of the banks are reluctant to lend : they'd rather use any surplus cash to pay off the expensive money they have borrowed.
  16. Thanks a lot that's really helpful and helps put my mind at ease. I've got a couple of defaults for the same debt and another couple where there is no credit agreement so about to contact the CRAs to hopefully get it tidied up. Cheers
  17. I have a couple of defaulted accounts - in the CRA records some have a "D" marker at the date of default (2006) then nothing else (despite the fact that I'm still paying). Others have a "D" at the date of Default then a "D" every month since (i'm paying something to the DCA most months). On this basis some will fall off my credit record 6 years after the default date but some wont drop off until 6 years after I make the final payment.
  18. Ok, I'll respond to the 3rd point also ; It's a fabrication that Britain doesn't make things any more, article by Philip Whyte, The Times, 13 March 2009 Its true that a lot of jobs manufacturing jobs have been lost but its mostly the type of sweat job roles that we dont want. Britain needs to focus on high end manufacturing and product and development roles and let the less developed nations do the hard graft metal bashing for us at a price that is much cheaper than we could ever hope to compete with. From the Sunday Times; " It's a fabrication that Britain doesn't make things any more. People who believe that British manufacturing has gone to the dogs tend to pay more attention to factory closures in industries that are in long-term decline rather than they do to rising output in other parts of manufacturing. The UK may no longer be a big producer of textiles but it is still a big player in many high-end sectors. Rolls-Royce and BAe Systems, for example, are key actors in the aerospace industry. Two of the world's largest pharmaceuticals groups are British (GlaxoSmithKline and AstraZeneca). And Cambridge is Europe's leading cluster for biotechnology. The UK even has an automotive industry - and not just in niches like Formula One, where it is a world leader. True, the demise of MG Rover in 2005 brought an end to mass car production by British companies. But thanks to companies such as Nissan (whose Sunderland plant is the most productive in the EU), the UK automotive sector produced more vehicles and engines in 2007 than ever before. Some people argue that output by foreign-owned companies in the UK should not be treated as British manufacturing. But on that logic, London is not an important financial centre. If output has been rising, why has manufacturing's share of GDP been declining? The answer, of course, is that output in the service sector has grown by more. What explains the rise in service sector output? Part of it is outsourcing: activities that manufacturers previously carried out in-house are now provided by service providers (think of catering). But the more important reason is that as countries become wealthier, they spend a growing share of their income on services (education, healthcare, holidays, meals out and so on). The decline in the manufacturing sector's share of GDP, it follows, is not a uniquely British phenomenon: it has taken place across the developed world. The process has admittedly gone farther in Britain than in Germany or Japan. But these two countries, where manufacturing still accounts for more than a fifth of GDP, are outliers. The UK is closer to the developed country norm. And President Sarkozy is wrong: manufacturing output accounts for a larger share of GDP in the UK (13 per cent) than it does in France (12 per cent) or the United States (12 per cent)." Nuk Em - your posts are a combination of mis-information, conspiracy theories, half truths and (more worringly) your own personal views presented to Caggers as truths. Dont believe everything you read in the media - do your own proper research and dont be blinkered.
  19. Yet more half truths..... UK Financial Sector - I agree that we are rapidly losing revenues and need to protect the sector whilst punishing those that have made mistakes. North sea oil has potentially 40 years of reserves left BBC NEWS | UK | Scotland | Oil reserves 'will last decades' Average tourist spends in the uk from middle east visitors were £2,684 lowest was from australians at £413 (hardly three ice creams) http://ec.emap.com/retail/retailweek/pdfs/touristspend/TouristSpendAug08.pdf
  20. More nonsense. Below is a list of Debt : GDP figures, the actual numbers are a little out of date and relate to the start of the crisis but all countries have been borrowing heavily in the last few months. What it shows is that we were ranked 50th and much better placed than many of the other large industrialised nations. List of countries by public debt - Wikipedia, the free encyclopedia Even if you include the stakes the government has taken in the banks as new debt then you have to also incude the asset value they have received in return - the debt has been used to buy shares which do have a value.
  21. Nuke em Lets have a little wager and we can pop back in say 1 month 3 months and 6 months and see who is right. Here is where we are today on a few values / indices; Gold (oz) - 938.25 Exchange rate £ : € -1.068 CPI inflation -0.0% Base rate - 0.5% FTSE - 3925 Dow Jones -7924 Here are my predictions; 30th April Gold (oz) - 960 Exchange rate £ : € -1.08 CPI inflation - (0.2) Base rate - 0.5% FTSE - 3700 Dow Jones -7600 30th July Gold (oz) - 980 Exchange rate £ : € -1.10 CPI inflation -(0.4) Base rate -0.5% FTSE - 3800 Dow Jones -7800 31st October Gold (oz) - 990 Exchange rate £ : € -1.12 CPI inflation -(0.2) Base rate - 0.75% FTSE - 3900 Dow Jones -7900
  22. This is like banging my head against a brick wall. .... there is no new printed money - they are increasing money supply by pursuing Quantative Easing which is buying gilts and bonds Unless I'm missing something banks exist to take customer deposits and then lend the money to other customers so how could they possibly have all customers balances ready and sitting in cash. Also not everyone in the country would want all their money under the mattress at the same time so why should it all be in physical notes ? so the pound devalues, imports become more expensive, Britain starts to import less, manufacture more, export more and tourists flock to the country from the continent because its so cheap - and the problem is ?? My point being that after a period the status quo would be found again. I'm sure you mean Britain came very close ... Nuke em, everyone is fully entitled to their opinion but you've made some very sweeping statements that are scaremongering; 1. Britain is the new iceland - no its not. 2. Interest rates will hit [17+%] - no they wont 3. We are going to have stagflation - I dont think so
  23. The above is more scaremongering ..... From Wikipedia; "Economists offer two principal explanations for why stagflation occurs. First, stagflation can result when an economy is slowed by an unfavorable supply shock, such as an increase in the price of oil in an oil importing country, which tends to raise prices at the same time that it slows the economy by making production less profitable.[5][6][7] This type of stagflation presents a policy dilemma because most actions to assist with fighting inflation worsen economic stagnation and vice versa. Second, both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply,[8]" So if we believe Wikipedia then we have 2 things to consider; 1. Oil price shock - unlikely given current economic situation 2. Excessive monetary growth - this being caused by the BofE pursuing Quantative Easing. QE is the BofE buying gilts or commercial paper (bonds) and thereby increasng money supply. The key thing about QE is that if / when it becomes apparant that inflation is becoming an issue the government simply starts selling the bonds / gilts that it previously bought thus reducing money supply once again.
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