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Banker Bonuses to be linked to Mortgage Lending
Comments
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Should we ?
I am not aware of that factoid, probably because it is factually incorrect.
.
The global financial crisis was caused by misallocation of risk on American mortgage backed securities.
UK mortgage lending standards had nothing to do with the collapse of global interbank lending..... The "credit crunch".
Unless you'd care to prove otherwise.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
So NRs business model was totally sound?
NR's loan book remains profitable to this day.
Even the spun off "bad bank" part made £300,000,000 in profit last year.
NR was the victim of the global financial crisis, not the cause of it.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »NR's loan book remains profitable to this day.
Even the spun off "bad bank" part made £300,000,000 in profit last year.
NR was the victim of the global financial crisis, not the cause of it.
Why did it require govenment cash then?0 -
HAMISH_MCTAVISH wrote: »The global financial crisis was caused by misallocation of risk on American mortgage backed securities.
UK mortgage lending standards had nothing to do with the collapse of global interbank lending..... The "credit crunch".
Unless you'd care to prove otherwise.....
The fact still remains the !!!!!! was going to hit the fan and we were ill prepared for the fallout.
If the story is true then its yet another instance of poor Government pandering to the banks and the "I want it now " brigade rather than for thelong term good of the country as a whole..0 -
Why did it require govenment cash then?
As mentioned, it was purely a liquidity problem.
NR got badly caught out by the freezing up of global wholesale credit markets.
Fact is, it has remained profitable throughout.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »As mentioned, it was purely a liquidity problem.
NR got badly caught out by the freezing up of global wholesale credit markets.
Fact is, it has remained profitable throughout.
A liquidity problem caused by long term lending financed by short term borrowing. Always a risky business made worse by the fact that they were lending over and above the asset values ot the security.
I would suggest that a lot of this risk taking was encouraged by bonuses paid throughout the organisation.0 -
snip.
Which is a nice distraction from the fact that UK mortgage lending did not cause the global financial crisis.
Northern rock was a victim,, not the cause.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »But when house prices fall not because of "true fundementals", but because of artificially restricted lending (mortgage rationing) that is OK?
I wouldn't so much call it artificially restricted lending as more sensible, sustainable lending. Lets hope they keep it that way.0 -
shortchanged wrote: »I wouldn't so much call it artificially restricted lending as more sensible, sustainable lending. Lets hope they keep it that way.
I think the wake up call was when the UK governments Minister for Housing realised he wouldn't have got a mortgage under the current restrictions.
Sensible and sustainable lending would be nice. Sadly, we're a long way from that.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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