LIBOR still dropping...

inspector_monkfish

LizEstelle wrote: »

Does anyone know whether the BoE is still considering this:

http://www.thisismoney.co.uk/mortgages-and-homes/mortgages-features/article.html?in_article_id=490790&in_page_id=58


???????????

always considering it...
see here:

http://forums.moneysavingexpert.com/showthread.html?t=1975285


although, according to the last MPC minutes, they never even talked about it, so make of that what you will

opinions4u

LizEstelle wrote: »

Yep - 3 month rate is now a third of what it was when this thread started.

And STILL the lenders are digging in their heels over fixed rates which are now higher.

Is there much demand for 3 month fixed rate mortgages where the capital has to be fully repaid at the end of the term?

I refer everyone back to the original posting. Why do the lenders expect fixed rate clients to pay for a disproportionate amount of their champagne, caviare, and end of year unearned bonuses?

Swap Rates are pretty much the same as they were a year ago. As LIBOR doesn't drive the fixed rate mortgage market I think you have your answer.

Don't forget to price in higher losses on mortgage lending while you think about it.

LizEstelle

inspector_monkfish wrote: »

always considering it...
see here:

http://forums.moneysavingexpert.com/showthread.html?t=1975285


although, according to the last MPC minutes, they never even talked about it, so make of that what you will

Words like 'incompetence' and 'economic' come to mind. Rearrange into a well-known phrase or saying...

inspector_monkfish

opinions4u wrote: »

Is there much demand for 3 month fixed rate mortgages where the capital has to be fully repaid at the end of the term?

Swap Rates are pretty much the same as they were a year ago. As LIBOR doesn't drive the fixed rate mortgage market I think you have your answer.

Don't forget to price in higher losses on mortgage lending while you think about it.

i think the point is, that LIBOR used to be a suitable tool for lenders, when working out their mortgage rates, whilst it suited them. Currently, it doesn't suit them!

inspector_monkfish

LIBORs 29th Sep

3mth 0.54
6mth 0.73125
12mth 1.09

LizEstelle

inspector_monkfish wrote: »

i think the point is, that LIBOR used to be a suitable tool for lenders, when working out their mortgage rates, whilst it suited them. Currently, it doesn't suit them!

... AKA lying.

Let's not mince our words here.

They choose one excuse after another to justify the unjustifiable. They were found out long ago on this - and nobody but nobody is calling them to account. Why do we have regulators with teeth in one industry but not in another? If I were a power or water company boss I'd be complaining long and and hard about this inequity of treatment.

inspector_monkfish

LizEstelle wrote: »

... AKA lying.

Let's not mince our words here.

They choose one excuse after another to justify the unjustifiable. They were found out long ago on this - and nobody but nobody is calling them to account. Why do we have regulators with teeth in one industry but not in another? If I were a power or water company boss I'd be complaining long and and hard about this inequity of treatment.

well, that was kind of my point
just didn't put it in quite such a feisty way !

inspector_monkfish

12:14 29Sep09 BANK OF ENGLAND NOT PLANNING TO ALTER RESERVES REMUNERATION ANY TIME SOON-ECONOMISTS AT BOE MEETING
12:14 29Sep09 BOE UNHAPPY WITH WAY MARKETS INTERPRETED KING'S COMMENTS ON STERLING LAST WEEK-MEETING SOURCE
12:19 29Sep09 BoE meeting flags no quick change to reserves framework

LONDON, Sept 29 (Reuters) - The Bank of England does not plan imminent change to its monetary framework by altering the interest rate it pays on commercial banks' reserves, say economists who attended a meeting with the central bank on Tuesday.

The meeting, hosted by BoE Deputy Governor Charles Bean, chief economist Spencer Dale and Executive Director for Markets Paul Fisher, was intended to give market participants a progress update on the 175 billion pound quantitative easing programme.

Economists at the meeting said the policymakers poured cold water on speculation the BoE is about to follow Sweden's Riksbank in cutting the remuneration rate on banks' deposits to enhance the effectiveness of the scheme, following widespread market speculation that has driven the yield on two-year gilts to an all-time low.

King held meetings with Sweden's Riksbank at the end of last week.
In fact, policymakers told attendees that it was only a secondary issue and was still being looked into by Bank staff.

Policymakers were also frustrated by the way markets interpreted Governor Mervyn King's comments on sterling last week.

In an interview published last week, King was quoted as saying sterling's fall against major currencies was helping a much-needed rebalancing of the British economy towards exports.

dannykos

I'm confused why if we've already paid to recapitalise the banks circ £250billion, then why do they STILL feel the need to increase margins to 'rebuild their balance sheets?'

something not right in all this…

opinions4u

dannykos wrote: »

I'm confused why if we've already paid to recapitalise the banks circ £250billion, then why do they STILL feel the need to increase margins to 'rebuild their balance sheets?'

something not right in all this…

Because most of that money was to return liquidity to the system (i.e. replace wholesale funding that had dried up) and not to keep capital to one side in case of bad debts.

They still need to reduce their loan balances in order to repay the funds that provided the liquidity.

They also need to generate the profit to be able to set more capital to one side before they could ever dream of expanding their lending operations again.

And that's before they buy out government shareholdings.

You won't see a lending lead housing boom for at least another decade.