I know there are a few P2P fans on here...
http://www.bbc.co.uk/news/business-35537714
"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"
What a pity that he didn't have these powers of foresight while at the FSA, which successfully prevented precisely no banking crises!
Former head of FSA on P2P...
Moderator: User Moderator
Re: Former head of FSA on P2P...
Zopa now has a scheme called Safeguard applied to some of their products which they variously describe as being a "10% buffer" or having "1.2x" coverage, although it's not entirely clear what this means.
https://www.zopa.com/lending/risk-data
Their stats (which might be carefully presented to support their case, of course) shows an increase in defaults from typically under 1% to exceed their expectation 4.33% at the height of the banking crisis in 2008 before falling back again. So if the Safeguard pot is enough to cover this more than twice over, it would seem to require a significantly larger upswing in defaults to wipe out the fund. However anyone at risk is a sitting duck when that happens... in the next 5 to 10 years according to this guy; is anyone with P2P exposure worried?
https://www.zopa.com/lending/risk-data
Their stats (which might be carefully presented to support their case, of course) shows an increase in defaults from typically under 1% to exceed their expectation 4.33% at the height of the banking crisis in 2008 before falling back again. So if the Safeguard pot is enough to cover this more than twice over, it would seem to require a significantly larger upswing in defaults to wipe out the fund. However anyone at risk is a sitting duck when that happens... in the next 5 to 10 years according to this guy; is anyone with P2P exposure worried?
Re: Former head of FSA on P2P...
Diversification etc etc should still be followed. That said, I have cash in RS but not zopa currently.
Re: Former head of FSA on P2P...
Ratesetter yes, sorry, too used to talking p2p on the independent forum so slipped into the abrieviations used there.
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