FSA- Forget lending restrictions, make banks lend more!

HAMISH_MCTAVISH

Lord Turner, chairman of the Financial Services Authority, told an audience at the Mansion House in the heart of the City on Thursday that current economic conditions meant the authorities should switch from imposing strict rules on banks to focusing on ways to make them lend more.

"Political independence to take unpopular action, to 'take away the punchbowl', is not the challenge today – the party is not so much out of hand as cancelled," he said. The speech was in contrast to the overriding concern of the Treasury since the 2008 banking crisis to implement new rules to prevent "bubbles" being created that later burst with dire consequences.

http://www.guardian.co.uk/business/2011/oct/20/turner-fsa-regulators-banks-consumers

This was always inevitable.

Only a matter of time, as many have pointed out.

sheffield_lad

That's is the issue, banks have a massive crash the worst for 70-80yrs but that's the point it was a one off, with no regulation would banks do it again? Errr no its cost them and more importantly to them their shareholders billions.

Should we learn some lessons from the crash yes, should we ensure the same type of crash can't happen again yes. but this mass panic of making banks carry way too much capital and putting in rules which cope with a chance in a million is being over the top.

Turnbull2000

The FSA have repeatedly indicated that lending restrictions would be detrimental to property values and the housing market as a whole. And they're right. Higher LTVs and higher salary multiples are imperative in ensuring more couples can buy that first property at a price that sellers demand. Otherwise they face a lifetime of ever rising rents, insecure tenancies (terrible for the kids) and unable to make a home their own.

doire_2

Government to make banks lend more? :rotfl:

Generali

doire wrote: »

Government to make banks lend more? :rotfl:

That was the start of sub prime in the US of course. Clinton told the banks that if they didn't start to lend to poor people, especially inner city living African-Americans, then he'd force them to do so.

Aberdeenangarse

Turnbull2000 wrote: »

they face a lifetime of ever rising rents, insecure tenancies (terrible for the kids) and unable to make a home their own.

Is that what your sisters told you?;)

Thrugelmir

HAMISH_MCTAVISH wrote: »

This was always inevitable.

Only a matter of time, as many have pointed out.

Total lack of reference to consumer lending in the speech.

IronWolf

And this moron is the head of the FSA? Was he in a comma during the last financial crisis caused by reckless bank lending?

Thrugelmir

IronWolf wrote: »

And this moron is the head of the FSA? Was he in a comma during the last financial crisis caused by reckless bank lending?

Lord Turner wasn't appointed until 2008......

shortchanged_2

howee wrote: »

That's is the issue, banks have a massive crash the worst for 70-80yrs but that's the point it was a one off, with no regulation would banks do it again? Errr no its cost them and more importantly to them their shareholders billions.

Should we learn some lessons from the crash yes, should we ensure the same type of crash can't happen again yes. but this mass panic of making banks carry way too much capital and putting in rules which cope with a chance in a million is being over the top.

We could well be heading for another one within the space of 3-4 years since the last one.

Generali

shortchanged wrote: »

We could well be heading for another one within the space of 3-4 years since the last one.

That won't be the fault of the banks however. They have been told they have to hold their reserves either at the national Central Bank or in Government bonds. As most central banks aren't paying interest that leaves the banks little choice but to buy 'govvies'. If the Governments go bust they take the banks' reserves with them.