Mark Carney: No more bank bail-outs – Telegraph

[Legal Beagles]

Mark Carney has pledged that taxpayer money should never again be used to prop up banks. The Governor of the bank of England, in his position as chairman of the international Financial Stability Board (FSB), has unveiled proposals for forcing creditors to bear banks’ losses. Mr Carney said agreeing global rules on dealing with losses […]

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[PAWS]

Re: Mark Carney: No more bank bail-outs – Telegraph

The fact that the big banks have and will lose money is not news and the fact that these losses are often incurred as the result of mismanagement and bad practices is certainly no big surprise. Now we all could write page after page of incidences where these banks have made appalling decisions but my big irritation is their ‘fire sale’ of debts.:twitch:
Early this year This is Money published the following:
S&P said that collection agencies will increase their spending from just over £800 million in2012 to almost £1.5 billion in 2017. The face value of the debt they buy in2017 is expected to exceed £10 billion.
Yet the big banks do not think that offering a debtor the chance to settle their debt for more than they sell it to a DCA is a good idea! A bank will refuse a debtors offer of up to 50p in the pound preferring to sell it for as little as 4p in the pound.
If a debtor who is in genuine difficulty is offered the chance to settle their debt at 10 -15p in the pound then many would do everything they could to scrape the money together and get their lives back on track. Selling it to the debtor for 5 or even 10% more than they sell to a DCA could make the bank millions! :doh:They could still claim tax relief on the loss.
If they do not have the manpower to administer these settlements or they are unable to differentiate between a debtor in genuine financial crisis and someone simply trying to avoid repayment then they should not have a credit licence in the first place.
OK, I can hear many of you shout that I am ‘over simplifying’ this and I totally agree but how can it still be acceptable for a large bank to sell off bad debts without first investigating the possibility of raising more money by allowing the debtor to settle for a reduced amount? Are they really so arrogant that they can simply throw away 5 or even 10% when selling a debt portfolio that two years ago was sold for £800 million and could reach 1.5billion in 2/3 years?:crazy: