I summarise and analyse key problems with observations of the UV bump in Active Galactic Nuclei ( AGN ) , and especially the accretion disc interpretation - the temperature problem , the ionisation problem , the timescale problem , and the co-ordination problem - and suggest that all these problems can be solved if , in addition to the accretion disc , there is a population of cold , thick clouds at approximately 30 R _ { S } which reprocess the intrinsic continuum .
Exploring cloud parameter space , I find that clouds with density n \sim 10 ^ { 12 } cm ^ { -3 } and column N _ { H } > 4 \times 10 ^ { 24 } cm ^ { -2 } reflect most of the intrinsic continuum , but convert a substantial fraction of the EUV luminosity into lines , dominated by Ly \beta and HeII Ly \alpha .
When velocity-blurred , this makes a false continuum peak at \sim 1100Å which fits the observed SED well , but turns back up in the FUV to make a hard EUV SED , as required by ionisation models .
I argue that the observed UV variability is dominated by this component of fixed shape , possibly due to changes of covering factor .
The amount of mass required is small , so it is not necessary to disrupt the disc , but only to make an unstable and inhomogeneous atmosphere .
The proposed clouds may be related to those suggested by several X-ray phenomena ( X-ray reflection components , high-velocity outflows , Compton thick partial covering ) but are not the same , leading to a picture with a wide range of inhomogeneous structures at different radii .