I might be missing what your saying, but there is a limited number of loans. The current approx. 25%/75% retail/wholesale volume split means the loans we are getting are all the loans that we will get. The only way to increase loans to retail, at that split ratio, is to increase the total number of loans, which just don't seem to be available at the moment.
Allowing the retail market to cherry-pick all loans before they go to wholesale would be unfair on the wholesale lenders, who already clearly take on the lower end of the loans. i.e. average retail RAR is around 12.2% vs average wholesale RAR around 9%.
Personally I think however Harmoney have been making the decision to split loans to retail and wholesale is okay - they appear to have been 'protecting' retailers to some degree, hence the higher average RAR of retail lenders. I'm not sure how much of this is due to historical influence (i.e. it may be changing). At around the beginning of this year the slowly growing gap between retail RAR vs wholesale RAR appears to have stopped growing and now appears to be constant or possibly even reducing. Something to watch over time. [shown in the RAR graph below]
Attachment 9907