bounce back loan top up declined.

Jeremy535897

The days in which banks used their own funds to lend are long gone.

MattMattMattUK

I meant their own funds in that they have to source* them, rather than the government handing them a bucket of money to hand out, which is why some of the challenger banks ran out of funds for the BBLS.

*I accept it gets very complicated due to most of the money not existing in the first place, though there are restrictions on that. 

Jeremy535897

MattMattMattUK said:

I meant their own funds in that they have to source* them, rather than the government handing them a bucket of money to hand out, which is why some of the challenger banks ran out of funds for the BBLS.

*I accept it gets very complicated due to most of the money not existing in the first place, though there are restrictions on that. 

I would guess some of them were bumping up against their limits due to insufficient reserves.

Grumpy_chap

Jeremy535897 said:

I would guess some of them were bumping up against their limits due to insufficient reserves.

I wonder if that's possibly one of many factors forcing tightening of consumer credit and restrictions of (unused) credit facilities, such as credit cards?

Jeremy535897

Grumpy_chap said:

Jeremy535897 said:

I would guess some of them were bumping up against their limits due to insufficient reserves.

I wonder if that's possibly one of many factors forcing tightening of consumer credit and restrictions of (unused) credit facilities, such as credit cards?

There are also capital adequacy rules. It's a complex area. Generally speaking, banks don't really like long unused credit limits, which is a nuisance, because even if you always pay off the balance in full, you might want section 75 protection every so often, particularly on a substantial purchase. The solution may be that you have to rely on the rules that say that you only have to pay a part of the amount on a credit card to get that protection.

Thrugelmir

Grumpy_chap said:

Jeremy535897 said:

I would guess some of them were bumping up against their limits due to insufficient reserves.

I wonder if that's possibly one of many factors forcing tightening of consumer credit and restrictions of (unused) credit facilities, such as credit cards?

The provision of unused facilities directly costs the banks money.  With margins being endlessly squeezed. Cost saving is now an efficient exercise to undertake. That's aside from the general tightening regulation of all forms of credit. Which places the liability firmly on the lenders for responsible lending.  Mortgages were first, then Payday loans etc etc. 

jonesMUFCforever

Jeremy535897 said:

MattMattMattUK said:

I meant their own funds in that they have to source* them, rather than the government handing them a bucket of money to hand out, which is why some of the challenger banks ran out of funds for the BBLS.

*I accept it gets very complicated due to most of the money not existing in the first place, though there are restrictions on that. 

I would guess some of them were bumping up against their limits due to insufficient reserves.

All UK banks have passed stress tests in last few years - no worries about reserves I think.
The main problem is low interest rates .

Jeremy535897

jonesMUFCforever said:

Jeremy535897 said:

MattMattMattUK said:

I meant their own funds in that they have to source* them, rather than the government handing them a bucket of money to hand out, which is why some of the challenger banks ran out of funds for the BBLS.

*I accept it gets very complicated due to most of the money not existing in the first place, though there are restrictions on that. 

I would guess some of them were bumping up against their limits due to insufficient reserves.

All UK banks have passed stress tests in last few years - no worries about reserves I think.
The main problem is low interest rates .

A small bank lending a lot of money under BBL could have problems with capital adequacy or possibly reserves.

jonesMUFCforever

I disagree - banks at present have too much savings balances and not enough people/businesses wanting to borrow (credit worthy ones).

jonesMUFCforever

mattyprice4004 said:

bigbadsoundman said:

Why stay with a bank that treats you like S### and nearly puts you out of business?

Because if you close your account, you'll get even less service and they'll have a much better chance of putting you out of busines...

I don't think he has closed the Nat West account just opened a new account elsewhere. If he had switched banks he might well have had to pay back the original BBL.