The Cost Of Christmas
I suppose I can afford the cost of Christmas, but others can’t. This article speculates that in London about half a million will turn to short term lenders.
Hopefully, people will start to see sense, especially after the government limits the charges in a couple of years time.
My worry, is that any legislation will push the really needy into the arms of illegal loan sharks.
Zopa And Funding Circle Get Government Funding
The Daily Telegraph is reporting that Zopa and Funding Circle are going to get tranches of funds to invest from the Government.
I very much applaud this move as although the sums are quite small at ten and twenty million pounds respectively for each, the government’s seal of approval can only help the growth of this form of lending. To put these sums in context, Zopa has lent over a quarter of a billion pounds and currently around thirty million is available to borrowers.
But surely the biggest boost is that with this extra funding, the publicity will drive more credit-worthy borrowers into the arms of Zopa and Funding Circle.
My only worry is a selfish one, that the interest rates available will drop because of the extra funds.
I certainly wouldn’t like to be holding any shares in a traditional bank.
I shall also be watching the return, that I’m getting on my money in Zopa.
Rothschilds Buy Into Zopa
This news seems to be good for peer-to-peer lending and Zopa in particular.
Read about it here on The Bankwatch.
Peer-to-Peer Lenders To Be Regulated
This is the heading on this article in the Daily Telegraph.
I’m not sure, I would trust any government to not produce a set of regulations that protected the wunch of bankers, who got us into this financial mess.
In my view Zopa, Funding Circle et al, are one of the ways to get out of the mess. So don’t strangle the baby!
Always Say No To A Bank
According to this article in the Telegraph, the banks are being told to cut down on commission-based selling to their customers.
I never buy anything from a bank. If I could find a pure money transfer company to manage my current account, I might move.
Banks should be made to publish anonymously the salary details of all employees, including all of their benefits and commissions in a form that could be downloaded as an Excel spreadsheet.
That would sort the problem out, as millions would analyse the results in great detail! It might even force some banks to withdraw from the market and we could have more coffee shops, bars and restaurants in good quality buildings.
English Councils Have Large Reserves
This article on the BBC shocked me. I always get the impression that councils are strapped for cash, but the Audit Commission says that they have £13 billion in reserves.
The councils should take a leaf out of this widower’s book and put it into peer-to-peer lending in their own area. I proposed putting a regional element into something like Zopa here.
They might lose the odd bit, but it would be safer than putting the money in an Icelandic bank.
A Predictable Autumn Statement
Predictable in that it was more of the same, even if you don’t like one or more of bankers, large corporations, benefit claimants, pensioners, unions or drivers. I don’t like at least three!
Some taxes and allowances went up and some went down. Was it ever any different?
We need some radical ideas to get the economy going?
Take these statements which are more or less agreed policy between all the major parties.
1. Banks should lend more to individuals and businesses, so that they purchase capital goods and services.
2. Savers should get a better return on their money.
3. The banks should have more capital reserves.
Point 3 is the elephant in the room, as any money the banks get goes on salaries or to improve their balance sheet rather than more lending.
So let’s leave it out and go to peer-to-peer lending, where borrowers and savers are put in touch by intelligent computer systems.
The Chancellor didn’t take the radical route and help peer-to-peer lending at the expense of the banks. After all if he did, the price of all those Government bank shares would drop. So as they will continue to lose value, wouldn’t it have been better if Gordon Brown had done the prudent thing and put them down, when they went bust?
But then Labour would never have got another vote in Scotland. As it is, Labour doesn’t seem to get many!
The Alternative Finance Routes Are Coming
I found this article on a website called Bridging and Commercial.
It talks about how Funding Circle are trying to bridge the gap in the market left by the withdrawal of ING, by paying an increased commission of 4% to intermediaries.
It is an article that should be read.
My reservations about Funding Circle is that they are very small in the overall scheme of things. They have currently lent about fifty million pounds, as against five times that amount by Zopa, which lends to individuals.
A £100 Button On A Nationwide Cashpoint
I needed to get some money out this morning, so I went to a Nationwide Cashpoint in Kings Cross Station. After keying in my pin, it offered me the usual choice, but with a special £100 button.
As that was what I was going to draw out, I just touched it and got my money!
How sensible!
And Now Savings Rates Go Negative!
The FT is now reporting that Credit Suisse is charging savers to keep their money with the bank.
I suppose we’re not there yet, but it seems rates are still going down.
