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FSA- Forget lending restrictions, make banks lend more!
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Not sure I entirely agree, yes the banks had to hold govt bonds but they chose to hold Greek etc bonds presumably because they were yielding more than German Govt securities. As always though the higher return reflected more risk. Just because the regulators didn't require them to address this risk doesn't mean it wouldn't have been prudent to do so. After all not every bank is being affected equally by the write downs/offs.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.I think....0
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Turnbull2000 wrote: »The FSA have repeatedly indicated that lending restrictions would be detrimental to property values and the housing market as a whole.
You are quite wrong.
Fact check please.http://www.contractormortgages.com/2010/11/08/cml-and-fsa-face-off-over-mortgage-lending-restrictions/
The Council of Mortgage Lenders is calling on the FSA to water down plans to restrict mortgage lending, saying they are flawed and impractical.
The Financial Services Authority has said it wants to stamp out irresponsible lending and give borrowers protection from taking out a mortgage they cannot afford, only to find they face repossession later.
There has been a row brewing between the two organisations for over a year since the FSA first suggested banning self-certified lending. In July, the FSA began consulting on further plans, which the CML believes will severely, and unnecessarily, hinder an upturn in contractor mortgage lending. Michael Coogan, the director general of the CML, now wants the FSA to redraft its rules.
The Council commissioned research which showed a lot of evidence that there would be negative, unintended outcomes if the proposed legislation goes ahead, Coogan said. The FSA has fought back by accusing the mortgage lending institutions of major failures leading to unaffordable borrowing in the years leading up to the recession.0 -
Fact check please.
Well, they do seem to have come around a bit on that front.
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.“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 -
This is the sort of homoeopathic remedy for the financial crisis - identify the root cause of the problem (reckless bank lending) and then take some more of it.
Perhaps money has a "memory"? As it circulates, it cures the very symptoms it caused first time round?
This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
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FSA- Forget lending restrictions, make banks lend more!
This, from the moron who told us cheap & easy credit had nothing to do with hpi.0 -
When in a hole shouldn't one stop digging?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Alternatively the patient is addicted to heroine - force them to go cold turkey and they will die of a heart attack, wean them off on methadone and they might become addiction free and alive...I think....0
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Alternatively the patient is addicted to heroine - force them to go cold turkey and they will die of a heart attack, wean them off on methadone and they might become addiction free and alive...
In reality cold turkey is the best to cure smack addicts. Using Subutex or methadone just traps them for the long term and the majority go back to the brown.
Keep lending sensible and every thing will be ok. House prices are correcting downwards and will become more affordable.
No need to make home lending more loose, maybe business lending could be improved though.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
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