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What a waste of time. C4 should be ashamed of themselves for. Putting this out as serious content when it could be done properly. As a poster stated above, there are lots of credit unions and BoD is nothing more than a badly run credit union without depositors.

Many of the staff that work for credit unions do so on a voluntary basis.....they are not paid a penny. ;)

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I fail to see why a person, Dave, needs a licence to take money from John and Steve, if Dave Tells John and Steve exactly what he is going to do with it.

You do need a licence when you purport to be respectable and make claims in public to strangers, but it is now widely known that the claims made by licensees are wildley off the mark and are a licence to rip strangers off, and receive "liquidity" when the rip offs go wrong.

Of course, if Dave doesnt do what he told John and Steve, then Plod will be knocking at his door.

The licence holder just waves the licence in the face of Uncle Bill and tells him to see the regulator.

You do not need a licence if you act as a broker, like Zopa. If you are accepting deposits, it is a regulated activity for which you need the relevant permissions. Credit unions and friendly societies can do this - it is no big deal.

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You do not need a licence if you act as a broker, like Zopa. If you are accepting deposits, it is a regulated activity for which you need the relevant permissions. Credit unions and friendly societies can do this - it is no big deal.

Regulated ....why?....because it is so easy to be a rogue where the law is not enforced.

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Regulated ....why?....because it is so easy to be a rogue where the law is not enforced.

If I can just look past the "the real villians are the banksters who look steal your money" gist, the regulation is to stop either totally unqualified or (semi) criminals setting themselves up as banks.

With no regulation or law enforcement, anyone can set themselves up as a bank. He then lends out the money badly, perhaps because he or she knows nothing about finance or credit, or to his brother-in-law who wants to set up an import-export business in Pakistan, which promptly goes bankrupt (sorry depositors, they are not registered as a credit institution, so no FSCS compensation).

You might argue that there should be caveat emptor rule in dealing with banks, but we tried that and realised that finance is too complex for people to understand, so some form of regualtion is needed. Much as in the same way that I cannot set myself up as a GP without the relevant medical qualifications and licences.

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No, cash deposits at a bank or credit do not have to be immediately lent out. A bank has 2 sides to its balance sheet - assets and deposits and are technically separate. Unlike p2p places like Zopa that have to match lenders to borrowers and do not have a licence to take deposits.

I am trying to find out what name BoD is trading under. There is no David Fishwick on the FSA register, excluding the one that works at M&G.

I think it is Burnley Savings and Loans Ltd.

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If I can just look past the "the real villians are the banksters who look steal your money" gist, the regulation is to stop either totally unqualified or (semi) criminals setting themselves up as banks.

With no regulation or law enforcement, anyone can set themselves up as a bank. He then lends out the money badly, perhaps because he or she knows nothing about finance or credit, or to his brother-in-law who wants to set up an import-export business in Pakistan, which promptly goes bankrupt (sorry depositors, they are not registered as a credit institution, so no FSCS compensation).

You might argue that there should be caveat emptor rule in dealing with banks, but we tried that and realised that finance is too complex for people to understand, so some form of regualtion is needed. Much as in the same way that I cannot set myself up as a GP without the relevant medical qualifications and licences.

its not complex if you stick to reality.

I dont need 6 years training to say I have £1 in this hand and can lend it to Bob who will pay it back.

I do need 6 years training if I say to you I have an asset in this hand that I can collateralise to Bob under a debenture backed self liquidating Obligation over agreed term. the six years training is so that I can keep a straight face while telling you, impressing you with my superiority, and say you are onto a good thing by lending me another £1, and I am doing you a favour by doing so.

Edited by Bloo Loo
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If I can just look past the "the real villians are the banksters who look steal your money" gist, the regulation is to stop either totally unqualified or (semi) criminals setting themselves up as banks.

With no regulation or law enforcement, anyone can set themselves up as a bank. He then lends out the money badly, perhaps because he or she knows nothing about finance or credit, or to his brother-in-law who wants to set up an import-export business in Pakistan, which promptly goes bankrupt (sorry depositors, they are not registered as a credit institution, so no FSCS compensation).

You might argue that there should be caveat emptor rule in dealing with banks, but we tried that and realised that finance is too complex for people to understand, so some form of regualtion is needed. Much as in the same way that I cannot set myself up as a GP without the relevant medical qualifications and licences.

You don't need all that lot at all.

What would convince me that a bank was doing a decent job? Firstly, it would be who they are, what their reputation is, what their track record is. Secondly, it would be whether my deposits were insured by a reputable organisation.

What would an insurance company insist upon, before they gave the insurance? Regular audits, paper trails, good practice and so forth. Why on earth would they insure them otherwise?

There is a web of self interest here:

1. The individual needs a trustworthy bank.

2. The bank needs to offer insurance in order to appear trustworthy.

3. In order to get insurance, the bank needs to adhere to the demands of the insurer.

It doesn't need to be any more complicated than that.

If whatever the bank wants to do is 'too complex for people to understand', then the insurer will refuse to insure the bank if they try it on. If it isn't all that complicated after all, then the insurer will allow it. In short, the insurer acts as a form of voluntary regulation, which is far better than state regulation.

Edited by Traktion
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I have an account with these people:

http://www.castleandminster.co.uk/

It was originally setup by Kirklees council.

I have slightly more confidence in the above organisation, rather than someone running a campervan emporium, and trading as "Bank On Dave"

No frantic running around Wall Street, or the City. No celebrities required!

Edited by Socially Housed
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You don't need all that lot at all.

What would convince me that a bank was doing a decent job? Firstly, it would be who they are, what their reputation is, what their track record is. Secondly, it would be whether my deposits were insured by a reputable organisation.

What would an insurance company insist upon, before they gave the insurance? Regular audits, paper trails, good practice and so forth. Why on earth would they insure them otherwise?

There is a web of self interest here:

1. The individual needs a trustworthy bank.

2. The bank needs to offer insurance in order to appear trustworthy.

3. In order to get insurance, the bank needs to adhere to the demands of the insurer.

It doesn't need to be any more complicated than that.

If whatever the bank wants to do is 'too complex for people to understand', then the insurer will refuse to insure the bank if they try it on. If it isn't all that complicated after all, then the insurer will allow it. In short, the insurer acts as a form of voluntary regulation, which is far better than state regulation.

So who checks the insurer is valid?

You are suggesting that insurers become de facto regulators. We will have lots of insurers checking different banks' credit scoring methodology, AML processes, capital levels, liquidity buffer quality, client asset protection, system and computer checks. And what will they be checking against?

Oh, yes. Insurers need to be approved and regulated by the FSA anyway. So we come full circle.

Edited by Ah-so
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I think it is Burnley Savings and Loans Ltd.

I can only find a Burnley Credit Union on the FSA register, which has been around since 2002.

What has Dave opened up under and how is he accepting deposits?

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I can only find a Burnley Credit Union on the FSA register, which has been around since 2002.

What has Dave opened up under and how is he accepting deposits?

http://www.burnleysavingsandloans.co.uk/

I don't see anything that shows his registration with anyone. Not even his consumer credit licence (which he must have).

Oh and he's promoting his book on Amazon. :lol:

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So who checks the insurer is valid?

You are suggesting that insurers become de fact regulators. We will have lots of insurers checking different banks' credit scoring methodology, AML processes, capital levels, liquidity buffer quality, client asset protection, system and computer checks. And what will they be checking against?

Oh, yes. Insurers need to be approved and regulated by the FSA anyway. So we come full circle.

who regulated them before the magnificent FSA was invented?

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So who checks the insurer is valid?

You are suggesting that insurers become de fact regulators. We will have lots of insurers checking different banks' credit scoring methodology, AML processes, capital levels, liquidity buffer quality, client asset protection, system and computer checks. And what will they be checking against?

Oh, yes. Insurers need to be approved and regulated by the FSA anyway. So we come full circle.

Who checks the FSA? Who watches the watcher?

Ultimately, bad banks and bad insurers will both go bust. A bank with a bad insurer is going to have their reputation tarnished too (i.e. they would be trusted less), which may lead to a loss of trust in the bank. The market is the final watcher here.

It is in the interest for all parties not to go bust, giving a positive impetus to monitor the activities of one another correctly. Instead of the banks trying to get away with what they can, they would need to keep the insurer on-side, by proving that they aren't taking the piss - the insurer could just walk away, potentially threatening the business of the bank if they think otherwise.

As an individual, you need to convince yourself that there is sufficient evidence for you to trust the institutions involved. However, you will always have some risk, no matter how small. Clearly, the FSA failed to observe and remove the risk.

Edited by Traktion
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Who checks the FSA? Who watches the watcher?

Ultimately, bad banks and bad insurers will both go bust. A bank with a bad insurer is going to have their reputation tarnished too (i.e. they would be trusted less), which may lead to a loss of trust in the bank. The market is the final watcher here.

It is in the interest for all parties not to go bust, giving a positive impetus to monitor the activities of one another correctly. Instead of the banks trying to get away with what they can, they would need to keep the insurer on-side, by proving that they aren't taking the piss - the insurer could just walk away, potentially threatening the business of the bank if they think otherwise.

As an individual, you need to convince yourself that there is sufficient evidence for you to trust the institutions involved. However, you will always have some risk, no matter how small. Clearly, the FSA failed to observe and remove the risk.

in the old days, they would put banks in solid looking buildings with greek columns and pyramids all over the place, grand marble floors and ornate ceilings...crooks then as much as now, but at least you could spend 5 minutes in granduer and marvel at the "soundness" of it all.

personally, I would prefer to bank in a portacabin with a few bobs extra interest for my trouble. The people behind the counter are the same whatever the facade.

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in the old days, they would put banks in solid looking buildings with greek columns and pyramids all over the place, grand marble floors and ornate ceilings...crooks then as much as now, but at least you could spend 5 minutes in granduer and marvel at the "soundness" of it all.

personally, I would prefer to bank in a portacabin with a few bobs extra interest for my trouble. The people behind the counter are the same whatever the facade.

Never judge a bank by its cover. ;)

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Anyone watch it?

He's already:

- Investing in property, developing it and claiming an uplift from £20k to £50k;

- Claiming a profit as a mark of success, when really it shows his loans seriously outweigh savers deposits;

- Creatively accounting, not telling us that the funds lent out originally were his own and charged at 0%, seriously inflating profits;

- Offering carriage clock like incentives to depositors (free ticket to Burnley FC match);

- Employing the services of arch spin doctors like Alistair Campbell;

The list goes on. He even went to Wall St and spread bet on a bunch of shares supposedly to show how easy it is to make 3% in a day, to justify deposit rates of 5%. And to top it all he's disbursed all his profit to local charities to show his caring side. Don't worry about the bank running out of equity. Dave has bought an insurance policy. But I wonder how much that costs. I'm sure I heard it said his non performing loans are running at a whopping 7%. So add that to the 5% interest and already you need to be charging 12% just to break even at the gross level. He'll probably need at least another 5% to cover overheads, so 17% for borrowers. Hardly bargain rates.

I'm all for banker bashing where it's due but this bumptious guy is a total joke. And yet he gets the ear of Vince Cable. We must be so fooked if this is the kind of behaviour we need to get Britain back on its feet. To me it all seems like so much hype. Clearly another millionaire in need of a TV career.

Well spotted. This shows that he has the talent to be a true banker.

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Anyone watch it?

He's already:

- Investing in property, developing it and claiming an uplift from £20k to £50k;

- Claiming a profit as a mark of success, when really it shows his loans seriously outweigh savers deposits;

- Creatively accounting, not telling us that the funds lent out originally were his own and charged at 0%, seriously inflating profits;

- Offering carriage clock like incentives to depositors (free ticket to Burnley FC match);

- Employing the services of arch spin doctors like Alistair Campbell;

The list goes on. He even went to Wall St and spread bet on a bunch of shares supposedly to show how easy it is to make 3% in a day, to justify deposit rates of 5%. And to top it all he's disbursed all his profit to local charities to show his caring side. Don't worry about the bank running out of equity. Dave has bought an insurance policy. But I wonder how much that costs. I'm sure I heard it said his non performing loans are running at a whopping 7%. So add that to the 5% interest and already you need to be charging 12% just to break even at the gross level. He'll probably need at least another 5% to cover overheads, so 17% for borrowers. Hardly bargain rates.

I'm all for banker bashing where it's due but this bumptious guy is a total joke. And yet he gets the ear of Vince Cable. We must be so fooked if this is the kind of behaviour we need to get Britain back on its feet. To me it all seems like so much hype. Clearly another millionaire in need of a TV career.

Makes me wonder about that claim of 9k profit at the end. Taking away the +18k on the house and the 1k on the gold, that is a loss of 10k, so he hasnt proven anything.

For me, his business model breaks down because he has to lend money only to the people that regular banks will not lend to. He will have a high rate of loans not paid back.

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Makes me wonder about that claim of 9k profit at the end. Taking away the +18k on the house and the 1k on the gold, that is a loss of 10k, so he hasnt proven anything.

For me, his business model breaks down because he has to lend money only to the people that regular banks will not lend to. He will have a high rate of loans not paid back.

maybe he was a singing pig poster...lending to the unlendable was a favourite of theirs.

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in the old days, they would put banks in solid looking buildings with greek columns and pyramids all over the place, grand marble floors and ornate ceilings...crooks then as much as now, but at least you could spend 5 minutes in granduer and marvel at the "soundness" of it all.

personally, I would prefer to bank in a portacabin with a few bobs extra interest for my trouble. The people behind the counter are the same whatever the facade.

Personally I bank with Tony. Tony is like bank, but better than a bank because banks get knocked off, but nobody knocks off Tony.

My barely-remembered quotation from 'Leon', is simply there to highlight the dangers in this.

Yes banks do fall over. It happens often in the USA, but the FDIC (a regulator) handles insolvencies superbly. In the UK, BCCI was a fraud that used smart buildings in smart locations. But there are a lot of smaller building societies (100+) and many more friendly societies that do Dave-style deposits and loans. They are registered and need to meet basic rules. It is not difficult or onerous, but it provides a basic check that prevents a well-meaning fool or crook spending an entire town's savings on a mono-rail.

I understand where you are coming from, but to simply repeat that bankers=banksters and FSA=idiots is not a sound argument for removing even minimum regulation around it.

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Personally I bank with Tony. Tony is like bank, but better than a bank because banks get knocked off, but nobody knocks off Tony.

My barely-remembered quotation from 'Leon', is simply there to highlight the dangers in this.

Yes banks do fall over. It happens often in the USA, but the FDIC (a regulator) handles insolvencies superbly. In the UK, BCCI was a fraud that used smart buildings in smart locations. But there are a lot of smaller building societies (100+) and many more friendly societies that do Dave-style deposits and loans. They are registered and need to meet basic rules. It is not difficult or onerous, but it provides a basic check that prevents a well-meaning fool or crook spending an entire town's savings on a mono-rail.

I understand where you are coming from, but to simply repeat that bankers=banksters and FSA=idiots is not a sound argument for removing even minimum regulation around it.

I wouldnt remove any regulation from banks.

I would endorse severe penalties for failing to meet regulations....It seems they are keen to follow up mis-selling years after the event, but covering up losses, schemes to convert bad debts into assets, off balance sheet deception, are never investigated with the rigour and punishment this sort of thing should attract.

The earlier this stuff is caught, the easier it is to prosecute too. Once a method is found that works for the swindler, it quickly becomes enshrouded in a mass of new products, terms, formulae and marketing gloss that cover up the fraud that it really is.

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...

I understand where you are coming from, but to simply repeat that bankers=banksters and FSA=idiots is not a sound argument for removing even minimum regulation around it.

The question isn't so much whether things should be regulated, but more a question of how and what should happen if the rules are broken.

If you rely on the state to lay down laws, with severe penalties which are applied if they are ignored, that's one way. However, you then have to ensure that they are applied even if it is political suicide to do so - 'too big to fail' can never be an excuse.

Alternatively, you can rely on insurers and the market in general (read: depositors) to set the rules. If the rules are ignored, the insurers may issue public warnings and/or withdraw their support, leading to the market (read: depositors) withdrawing their money.

Which would I expect to be more affective? The second option, every time, as it gives power to the people who use the services, rather than stripping them of power, as the first option does.

No doubt, some will say that withdrawing deposits is a bank run and this can't be allowed to happen because some will withdraw all their money, while others will get none. If that is a genuine risk, which depends on how the bank reacts to such a run initially, then I would suggest alternative banking models, such as mutual funds (as in 'limited purpose banking'). TBH, the current model is so fragile, it would be unlikely to exist without state support, which is why it shouldn't exist at all.

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I might have misheard but I think the narator mentioned that he bought up cheap houses in need of refurbishment to do up and rent out with his own spare cash (that would be originating from his other business) so it probably wasn't depositor money or directly connected to the bank - just to give a bit of background about him personally perhaps?

If you listen to the prog again it's clearly stated the property rent is supposed to finance the running cost of the bank. Like, er, should the bank not be able to finance itself from, er, banking? Maybe Tesco should buy a few Burnley two-up-two-downs if their bottom line is feeling the pinch, what with property being the everlasting money tree, all of which feeds into ...

And maybe a convenient way to illustrate that there are run down empty properties going for £20K in his home town perhaps?

... which people in the local community might need a loan from Dave to purchase. Not because they need a house but cos their investment will leap in price £30k on tarting up, plus produce rents capable of supporting a bank! Seriously, anyone on this site who advocates this behaviour hasn't a clue about what we find objectionable about the housing bubble. This behaviour was EXACTLY the sort of thing people here critcised HBOS for when they took a stake in Grant Bovey's "business". For those with the memory of a goldfish I reproduce the following:

‘I am sitting in our £5million chateau in Megeve in the Alps. I will sue anyone who says that Imagine Homes

is in financial difficulty. We are 20 per cent owned by HBoS and we have huge profits that have yet to materialise.’

- Grant Bovey , CEO Imagine Homes, Anthea Turner's husband Grant Bovey loses buy-to-let empire in credit crunch, Daily Mail, Oct 08

Edited by Sledgehead
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Makes me wonder about that claim of 9k profit at the end. Taking away the +18k on the house and the 1k on the gold, that is a loss of 10k, so he hasnt proven anything.

You are mixing up capital expenditure (a balance sheet entry) with costs (part of the income statement). The property may well produce a rental stream. This will be part of the bank's income which will feed into profits from "other activities". Set against that will be the cost of finance, if any. I'm guessing it is financed through shareholder funds and thus becomes part of bank equity.

Besides this "other operations" income, he has the income from lending. Again, if these funds came from shareholders, they have no associated costs. If they come from savers, the cost of interest paid to savers would be deducted from interest on the loans to produce the profit on bank activities. Any bad loans would have to be written down in the balance sheet and these would feed into income statement, but other than in this situation the sums lent and deposits received would not feature in the profits of the bank. Loans become "assets" in the bank balance sheet, deposits become liabilities.

Generally the bigger the assets the larger the income. Banks like HBoS lent with abandon prior to the crunch, producing huge transient profits. That's why their share price soared as investors stupidly concentrated on profits. Lloyds by comparison went sideways for much of the boom in lending because they refused to expand their balance sheet so aggressively. Indeed they were criticised by fund managers for missing opportunities. That's why many of us thought it a safe investment when the crunch arrived. We even kept believing when Peston announced the de facto takeover of HBOS by LLoyds, because we knew Lloyds had been refused leave to takeover HBOS so many times in earlier times on competition grounds. We would be the last bank standing: what an opportunity! Of course, our faith in free markets and competition proved ill founded.

Edited by Sledgehead
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You are mixing up capital expenditure (a balance sheet entry) with costs (part of the income statement). The property may well produce a rental stream. This will be part of the bank's income which will feed into profits from "other activities". Set against that will be the cost of finance, if any. I'm guessing it is financed through shareholder funds and thus becomes part of bank equity.

Well they didnt go into detail about how that profit was created. Plus, in another part of the program, they said that he had made an 18k profit on that house (purchase price plus cost of refurb subtracted from EA valuation) and a 1k profit on the gold. I was wondering if, in an effort to justify giving to charity, they just added those unrelated profits onto the profits of the general business.

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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