Kibkom North Cyprus Forum

So how's this going to work for us with tl deposits good or bad ?

50/50 chance of it being one or the other - lol. Guess we will just have to wait and see. Whatever, Happy Christmas.

Heard one back increased its rate to 18.5%...already..

terry2366 wrote: ↑

Sat 25 Dec 2021 11:00 am

So how's this going to work for us with tl deposits good or bad ?

Bad.

Ready for the gloom mongers

You don't have to be a monger af doom to see what will happen. Look at the lira charts to see a currency which has collapsed and an economy which has been trashed by covid.

I'm not expert but my back of a fag packet would look like this.....

A typical bank has deposits of say £10m.

The bank will typically lend £9m to borrowers.

And keep £1m to service day to day needs and withdrawals.

In the current crises do you think all of these loans will be paid back - ever?

And the current lira strength is being funded how?

ginge wrote: ↑

Sun 26 Dec 2021 11:45 am

You don't have to be a monger af doom to see what will happen. Look at the lira charts to see a currency which has collapsed and an economy which has been trashed by covid.

I'm not expert but my back of a fag packet would look like this.....

A typical bank has deposits of say £10m.

The bank will typically lend £9m to borrowers.

And keep £1m to service day to day needs and withdrawals.

In the current crises do you think all of these loans will be paid back - ever?

And the current lira strength is being funded how?

Ginge

There is a thing called the Reserve Asset Ratio that allows credit creation.

If you are a bank and have 1m in cash, and the reserve asset ratio is 5% , you can lend 19m, with the 1m .

Turkeys Reserve Assert Ratio is 8%

MVP wrote: ↑

Sun 26 Dec 2021 12:28 pm

ginge wrote: ↑

Sun 26 Dec 2021 11:45 am

You don't have to be a monger af doom to see what will happen. Look at the lira charts to see a currency which has collapsed and an economy which has been trashed by covid.

I'm not expert but my back of a fag packet would look like this.....

A typical bank has deposits of say £10m.

The bank will typically lend £9m to borrowers.

And keep £1m to service day to day needs and withdrawals.

In the current crises do you think all of these loans will be paid back - ever?

And the current lira strength is being funded how?

Ginge

There is a thing called the Reserve Asset Ratio that allows credit creation.

If you are a bank and have 1m in cash, and the reserve asset ratio is 5% , you can lend 19m, with the 1m .

Turkeys Reserve Assert Ratio is 8%

Blooming heck!

It's worse than I thought then. They have lent money they don't actually have?

I'm going to need a bigger fag packet....

They now do have it , it's just leant out.
The magic of the global financial system!

MVP wrote: ↑

Sun 26 Dec 2021 2:22 pm

They now do have it , it's just leant out.
The magic of the global financial system!

...and if what is lent out can't be paid back?

ginge wrote: ↑

Sun 26 Dec 2021 3:37 pm

...and if what is lent out can't be paid back?

Banking used to be a very sober business. You wanted to borrow money, you had to prove you could pay it back. They also liked to see you had some skin in the game as well, so would only lend you a percentage of the total cost of what you were buying.

Who remembers saving a deposit for a mortgage with a building society for a couple of years?

The problem with that is business is all about growth. After everyone who can possibly pay back loans has taken them out, who is left for you to lend to?

Those who probably can’t pay it back.
Your bad debts go up but if enough pay it back and you’ve charged enough interest you’ll still make a profit.

Before long you’ll tap out that market so you have exhausted the will pay it back market and the might pay it back market.

The only market left or the only potential growth is the zero chance of paying it back, unless they win the lottery, market.

Here endeth the history of the 2008 credit crisis.

laptatony , wot have you heard . My interest rate dropped a little today . What’s the best being offered , from who ?

The Banks here do need to adopt certain Banking standards from overseas , specifically when it comes to fees and charges.
One expat bank as the name suggests does little for expats imo
The main income for many expats are FX transfers coming in from abroad. So this Bank charges hefty sums for this incoming transfer knowing that expats will need to do this. Not very expat friendly to me.

Another bank charges £150- £250 to do one swift transfer and you can only do a maximum of £25,000 each time. Another way of ripping customers off who need to send money from TRNC to overseas.