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In June 2006 RBS decided to launch a big push into complex US loan structures linked to sub-prime mortgages.
"There were concerns that there were arrangements in place that enabled other external entities to generate a profit out of certain loan structures or other financial arrangements that the schools had in place," the education minister said.
Johnny Cameron, the former head of Royal Bank of Scotland's investment banking division, has admitted he did not know how billions of pounds of complex loan structures linked to US sub-prime mortgages worked – despite pushing his staff to expand aggressively into this area.
Wall Street executives with knowledge of the loan structures, who were not authorized to speak on the record, suggested that some banks have not moved the loans outside of the broker-dealer because doing so might draw regulatory scrutiny and would require these banks to rewrite thousands of client contracts.
This has allowed multiple new distinctions to be made amongst the creditworthy, as scores get attached to different interest rates and loan structures.
As of late, loan structures and syndication have become so ridiculous that any number of minute stake holders could act as blockers against a logical move for both the majority of the lenders in a given loan and the developers themselves.
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Mr. Goodwin, 30, is an associate specializing in loan structuring at Citigroup in Manhattan.
He did not support the 2012 changes; however he does support the income-contingent loan structure of repayments.
The loan structure, which is within the law, centred around a type of Dutch co-operative, an unusual corporate entity first allowed in the mid-19th century to assist dairy farmers.
With the way the maintenance loan structure currently works, there is about a £3,700 gap between what students receiving the minimum loan receive, and what is received by those on the maximum.
That type of piggyback loan structure "has become more available and we are seeing it more frequently," said Erik Johansson, vice president of mortgage lending at Guaranteed Rate, a mortgage lender in Schaumburg, Ill.
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