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White Collar Crime - The Bank Part 4

See: Part 1, Part 2, Part 3,

So the Bank has "your" promissory note/ money youve created. They dont lend you money, they have no loss, they then make an electronic entry into their T1 Ledger showing in our example £100k to make things simple.

This is then deemed your loan value but effectively you have created the money with your signature?

The Banks then hold title at the land registry until the loan value is extinguished.

The £100k you "borrow" or gave them in the form of a promissory note is also called a security.

The Bank after a few successful payments flags your security as being able to be securitised and bundles these together for sale through a company they set up to handle the securities a Special Purpose Vehicle (SPV) .

The securities can also be termed a Residential Mortgage Backed Security (RMBS), Property Bonds or CDO's Collateralised Debt Obligations.