morpeth

It would be very odd that the FCA would allow a third party to verify the 'know your customer rules, however if the account belongs to WISE, the UK bank would still probably do some cursory checks but WISE is liable- which may explain why on occasion when there is an issue with WISE about a transaction some have reported problems getting resolved or WISE closing the account.

My experience with WISE has been very positive. But as with the recent SVB bank failure in the States, or some of the Fintech issues in the UK (such a Assetz , or worse Funding Secure etc), WISE could close overnight is a possibility even if remote, I certainly wouldn't leave a lot of cash in a WISE account.

When I was a CFO of a company we had bank accounts for different trade names- but ownership was by the parent company. I suspect WISE somewhat similar but doesn't advertise this.

UKMS

well it’s already been established that they don’t fall under the compensation scheme.

Yes you can send a transfer from any bank to your unique sort code and account number or IBAN and it will be immediately credited to your account. I do it several times a month from UK bank accounts and EU accounts.

morpeth

1 )So do it through the bank or through WISE ?

2) If it is actually your account, then one would assume you go go direct the bank, or change the address at the bank- just because your name is on an account doesn't mean it is yours.

UKMS

I send money from my other UK or EU bank (typically HSBC). to my unique sort code and account number or IBAN and it is immediately credited to my Wise account. The same as I would credit funds to any other bank. The process is exactly the same. Addresses don’t come into it. No difference in the process I use with Monzo (which is a bank).

morpeth

Actually the WISE website makes it clear when you deposit/receive money that they take balances and invest it themselves :Where is my money held?

Wise uses two approaches to safeguard your funds. We deposit your funds at banking institutions and invest them in government backed liquid assets, primarily government bonds.

At Wise, we believe in transparency. That’s why it’s important for you to know where customer funds are held.

Here’s how Wise safeguarded UK customer funds, as of the end of January 2023:

Type

Institution

Country

Cash Deposit

ADYEN N.V.

Netherlands

Cash Deposit

AS LHV Pank

Estonia

Cash Deposit

BARCLAYS BANK PLC

United Kingdom

Cash Deposit

CITIBANK N.A.

United Kingdom

Cash Deposit

JPMORGAN CHASE BANK, N.A

United Kingdom

Government Bond

EU, US and UK Governments

United Kingdom

· Risk: Holding money with banks carries risk. In order to mitigate our risks, we invest your money in safe and low-risk assets like bonds.

We only invest in high-quality liquid assets. These are investments that are classified by the FCA as low risk and highly liquid. This means that we invest your money primarily in obligations of developed governments such as Germany, UK, US, etc.

morpeth

Again, just having your name on an account doesn't mean you are the owner of the account, and as I posted any balance you have in WISE they openly say they invest.

I do the same I can receive funds direct to the unique account number WISE provided.

If it is my account of course the bank would allow me to change the address. Or close the account. Or send a wire from the account.

Pulaski

Ironically, the primary immediate cause of the collapse of Silicon Valley Bank was because it had invested heavily in what are commonly regarded, around the world, as along the lowest risk investments - bonds issued by the US Treasury. The sharp rise in interest rates as a simple function of the maths of investing in bonds, has caused the value of those bonds to plummet.

UKMS

You are losing me slightly ….. the point that originally started was whether the account numbers were unique and they are. My address is registered with Wise and I can change it and I can close the account whenever I want. So with respect I’m not sure what your point is ?

morpeth

My point actually may not be too germane to the discussion, in retrospect.

I like WISE and use it frequently, but I certainly wouldn't leave five figure sums for them to invest, especially as the long era of declining or low interest rats has started to end- I assume the risk factors will start to increase, and who knows how many derivatives or swaps they use to gain a few extra pennies per pounds or ten pounds deposited with them.

morpeth

I wonder how much damage to government budgets will result having to re-finance current debt.

I was in Silicon Valley Bank when it started- the business model originally was a good one if it had stayed small.

UKMS

I don’t leave five figure sums hanging around for long but happily trust them with that for what I need to do.

Pulaski

I suspect "not much" as a lot of US and UK government debt is issued for 30 years, so the interest expense for governments is averaged over the life of the debt they issue and the oldest debt that is currently falling due for repayment was issued in the early-mid 90's at around current interest rates or higher. So as long as rates fall again over the next 5 -10 years there won't be much harm done to government budgets, at least not in the countries I am most familiar with.

If it was me managing the national treasury at the moment, I would be issuing more 5-10 year debt in the expectation that when it matures it can be refinanced at a lower interest rate.

morpeth

A lot of US debt is below 20 years and a substantial amount under 10 year. While of course speculation, I suspect interest rate on average will creep upwards the next 10 years considering the national debt over $30 trillion

.“The loudest critics of the US debt and Fed monetary policy will point to $28T in US Debt and quickly calculate that every .25% interest rate move costs the US $70B a year. ..

There are $6T+ of Non-Marketable (Non-Mrkt) securities which are debt instruments that cannot be resold. The vast majority of Non-Mrkt is money the government owes to itself. For example, Social Security holds over $2.8T in US Non-Mrkt debt, almost half the total Non-Mrkt amount. This debt poses zero risk because any interest paid is the government paying itself.

The remaining $22T is broken down into Bills (<1 year), Notes (1-10 years), Bonds (10+ years), and Other (e.g. TIPS).”

https://schiffgold.com/exploring-fin...sis-june-2021/

“There is currently $4T outstanding in short-term treasury bills, up more than double the amount 3 years ago…However, as interest rates creep up, interest costs will eventually rise. CBO projects that interest costs will grow from $331 billion this year to $910 billion in 2031 — a nearly threefold increase. This year’s interest payments work out to roughly $2,600 per household.”

How Will Interest Rate Changes Affect Federal Debt and Deficits? (pgpf.org)