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Banker Bonuses to be linked to Mortgage Lending
Comments
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Was it because he was late with his credit card payment last month?HAMISH_MCTAVISH wrote: »Maybe you should ask him.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.
You should sell blinkers. You are a walking advertisement.0 -
HAMISH_MCTAVISH wrote: »
Northern rock was a victim,, not the cause.
Why was it the victim Hamish?
What exposed NR so much?0 -
Graham_Devon wrote: »Why was it the victim Hamish?
What exposed NR so much?
Surely it wasn't anything to do with poor management was it Graham.0 -
Graham_Devon wrote: »What exposed NR so much?
I should imagine people queuing up to withdraw all their savings was not a help.0 -
Wrong - look at the default ratios. They remain low.
NR failed because it relied on the continuous availability of credit from the wholesale markets. In the past the assumption had always been (correctly) that if one international bank couldnt lend there was always another who would.
This assumption proved incorrect when the wide circulation of effectively unbacked US mortgage (in)securities stopped the wholesale money markets working overnight. No bank would lend to another as it had no guarantee that the borrowing bank's exposure to these US securities wouldnt cause it to fail before repaying the loan.
When the wholesale markets froze NR was unable to pay back its current loans as they matured.
Once the government stepped in and provided the backing, NRs mortgage business carried on happiily making the type of profit it had in the past.
This post should be required reading for those who think NR caused the financial crisis.“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 -
The days of banks lending willy nilly are gone. Face it0
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The days of banks lending willy nilly are gone. Face it
And a good thing too.
What we now need to get back to is sensible historical norms for lending.
Where a 5% to 10% deposit would get you a rate of 1% to 2% above base.
Where having a CCJ is a problem for borrowers, but forgetting to pay a parking ticket 18 months ago is not.
Sensible, sustainable lending....
As opposed to the current draconian regime which requires £40,000 deposits to get a decent rate, and allows banks to cherry pick the best customers, excluding the majority, whilst profiteering with margins 300% bigger than they were in 2007. Which is of course far from sustainable.“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 -
the bonus's will never go,
If they dont pay the bonus's then the bankers will move to european companies who WILL pay the bonus's or Asian companies who pay them bonus's.
Our economy at the moment is FINANCE... its not manufacturing, and without them, the days will get darker and the nights colder.
At the end of the day, you have to just let free markets operate. The government, does not need to interfere, there is no point giving them trading restrictions when the rest of the world carries on, its either an IMF led initiative that is embraced globally or it isnt. It ISNT, so its appearing that its only a matter of time before it continues.
When interest rates increase, the mortgage payments will to, so RPI (linked to housing costs) will go through the roof, in the same way it went negative in 2008/9, when all these pensions lead by RPI and benefits are changed to CPI increases (ie excluding housing) we will see interest rates rise, until then, dont BANK on itPlan
1) Get most competitive Lifetime Mortgage (Done)
2) Make healthy savings, spend wisely (Doing)
3) Ensure healthy pension fund - (Doing)
4) Ensure house is nice, suitable, safe, and located - (Done)
5) Keep everyone happy, healthy and entertained (Done, Doing, Going to do)0
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