What’s up with the Nationwide? The back office is falling apart it seems. David Rigney and his operations managers, needs to start managing.
Two weeks ago I had a closure statement for a Capitalbond 92 account that I hadn’t even opened. Fortunately, there was no interest shown, but I would love to know where the phantom principal is.
Last week a family member received back her tear off slip in a window envelope, acknowledging that her bond maturity instructions had been received. Unfortunately, stuck behind her slip was a similar slip addressed to a Mr Alexander in Kilmarnock. The stray slip was handed in, same day at the local branch for forwarding to the rightful recipient. Staff at the branch at least took responsibility for sending it on, once I made it clear that it was nothing to do with me. So Sir, it should be with you soon!
And on Saturday, I eagerly opened a plain front envelope expecting a cheque for about 30p from Nationwide – more on this later. But the cheque was only for 2p and payable to a Mistry person. I will pass the wrong cheque to the local branch later today, so I hope the person who has my cheque will do likewise! Mistry will be 2p better off; but how much is First Class mail, even assuming Nationwide gets a bulk discount?
One of Nationwide’s problems is the internet offering. I can do transactions on the internet at home but can't send messages to Nationwide from home, without being timed out on the server. I therefore have to complain over the phone or via the terminal in the local branch.
As for the reason for the 30p cheque. There is a problem affecting people who have access to internet banking but who have not signed up for a FlexAccount. When an e-bond matures, it is automatically transferred into an e-bond maturity account if the final balance, is not reinvested on the bond maturity date. If a few days elapse before the reinvestment decision is made, the internet only gives the option to transfer the maturity date balance into a new account. The few days of accrued interest in the e-bond maturity account becomes orphaned. The actual amount of such interest is not however, displayed.
Nationwide advised me to use the close account option for the e-bond maturity account and the “hidden” interest would appear. Simple, you might think, but the balance from closing an e-bond maturity account can only be sent to a FlexAccount and not to an Instant Saver account, which is deemed to be a branch account. Therefore, on closing the e-bond maurity account, I was internet messaged to inform me that a cheque for the interest was being sent to me.
Why is Nationwide struggling? Are there too many ISA’s being opened now? Has the unemployment rate in Swindon suddenly fallen and they can’t get the staff? (I’ve been out of work for over a year now – I’d be happy to stuff envelopes)
Monday 29 March 2010
Saturday 13 March 2010
Repo 105 vs FSA soft touch regulation 101
Two things strike me about the Lehman Brothers accounting for the over-collateralised repos. What did the counterparties do in respect of their own accounting treatments of the repos and what anti-money laundering investigations were made?
If Lehman's booked a sale, how did the counterparties such as Barcap, UBS etc, account for the repos? Were they purchasing the assets on an outright basis or did they regard these as normal repo transactions?
Unfortunately we'll never know. Lehman's year end was November while European banks have December, and Japanese banks March year ends, respectively. Thus banks can readily teem and lade assets and liabilities in order to help each other present the best balance sheet possible at the year end.
Perhaps as part of the global reform of the banking system, all banks should have the same financial year end.
The money laundering angle is simply the case that if I, as a customer of a bank, were happy to accept $100 for liquid assets clearly worth $105, such a suspicious contract should lead to the bank investigating me for potential money laundering.
But then the FSA withdrew its rule book on money laundering in early 2006, relying on banks to use their own code of practice for "know your customer" procedures based on a risk-based approach.
A typical in-house code would require a bank to investigate customers entering loss-making transactions where the loss is avoidable or transactions which have no apparent economic purpose. Also any suspicion of illegal activity or attempts to hide money from law enforcement and tax authorities should be followed up.
What the risk in the risk-based approach has come to mean, is the risk that the activity is found out or that the FSA will admonish the financial institution. The FSA's light touch has been a soft touch as far as the banks are concerned.
If Lehman's booked a sale, how did the counterparties such as Barcap, UBS etc, account for the repos? Were they purchasing the assets on an outright basis or did they regard these as normal repo transactions?
Unfortunately we'll never know. Lehman's year end was November while European banks have December, and Japanese banks March year ends, respectively. Thus banks can readily teem and lade assets and liabilities in order to help each other present the best balance sheet possible at the year end.
Perhaps as part of the global reform of the banking system, all banks should have the same financial year end.
The money laundering angle is simply the case that if I, as a customer of a bank, were happy to accept $100 for liquid assets clearly worth $105, such a suspicious contract should lead to the bank investigating me for potential money laundering.
But then the FSA withdrew its rule book on money laundering in early 2006, relying on banks to use their own code of practice for "know your customer" procedures based on a risk-based approach.
A typical in-house code would require a bank to investigate customers entering loss-making transactions where the loss is avoidable or transactions which have no apparent economic purpose. Also any suspicion of illegal activity or attempts to hide money from law enforcement and tax authorities should be followed up.
What the risk in the risk-based approach has come to mean, is the risk that the activity is found out or that the FSA will admonish the financial institution. The FSA's light touch has been a soft touch as far as the banks are concerned.
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