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Scandalised!
Comments
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The 'landscape' has changed more in the 21st century than Mrs Thatcher changed it during the 1980s.
Mrs T didn't create the credit boom.
Without financial services ( not just banks) what would have driven the UK economy? Brown wouldn't have had the tax receipts to go on his welfare spending spree either.0 -
Thrugelmir wrote: »Why was it nationalised then?
Your link makes that clear.1.5 The raising of funds through regular securitisations and shorter term inter-bank borrowing enabled Northern Rock to expand its business rapidly.
As one source of funding was repaid, the company had to identify further sources of funding on a rolling basis.
The success of its business model was therefore dependent on:
-Northern Rock’s ability to raise money in the inter-bank and securitisation markets to repay existing short term borrowing and fund additional mortgage lending;
-Its ability to pay a lower rate of interest on the money which it borrowed than the interest it charged to mortgage customers.
1.6 In the summer of 2007, the world’s financial markets entered a period of turbulence triggered by fears of over-exposure to American sub-prime mortgages.
Financial institutions and investors started to reduce their purchases of mortgage-backed assets on the wholesale markets.
At the same time, banks began to retain cash
to meet their own liquidity requirements and to reduce the risk of losses from loan defaults.
This combination created a shortage of liquidity that threatened institutions reliant on the wholesale markets to fund their mortgage lending business.
1.7 Northern Rock had planned to securitise around
£4 billion of mortgage loans through the Granite
structure in the Autumn of 2007.
In September, however, deteriorating market conditions caused the proposed underwriter to withdraw and the securitisation did not proceed as planned.
Northern Rock was also finding it harder to raise money in the wholesale inter-bank markets.
Rollovers of wholesale funding were largely continuing, but at shorter maturities and higher interest rates.
1.8 Northern Rock’s difficulties in meeting its funding needs meant that there was a likelihood that it would have to draw on its stock of high quality sterling liquid assets and sell other assets, probably at distressed sale values.
In these circumstances, the company’s auditors informed the Financial Services Authority on 11 September 2007 that they had reasonable grounds to believe that Northern Rock might cease to be a going concern.
Although one part of NR's loan book, the 125% together mortgages, had an arrears rate approaching 5% at the depth of the crisis, defaults on the mortgage book as a whole remained within acceptable limits and were not the cause of Northern Rock's collapse.
The cause is clearly stated within the report.
As per above quote.“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 -
Thrugelmir wrote: »Mrs T didn't create the credit boom.
Without financial services ( not just banks) what would have driven the UK economy? Brown wouldn't have had the tax receipts to go on his welfare spending spree either.
I don't understand the question. If Mrs T didn't create the credit boom, then who did?
G. Brown (apparently) cashed in upon the Thatcher boom years?
But so did the banks - BigTime!
You said that 'measures will be adopted' - what did you mean?
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
it means it doesn't know what is going to happen
it means that, unusually, the world of politics, government and economics may be about to change.
TruckerT
another load of nonsense
except I do agree that our politicians can't foresee the future ( in common with 100% of the rest of the world.0 -
another load of nonsense
except I do agree that our politicians can't foresee the future ( in common with 100% of the rest of the world.
Yes, but usually politicians are confident that they are in control.
This is no longer to be guaranteed.
The whistle-blower culture threatens us all.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
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I don't understand the question. If Mrs T didn't create the credit boom, then who did?
Politicians.FSA head: Gordon Brown helped fuel banking crisis
Gordon Brown helped fuel Britain’s banking crisis by pressuring the City regulator not to intervene and stop reckless lending, Lord Turner, the head of the Financial Services Authority, said.
http://www.telegraph.co.uk/finance/financialcrisis/4809284/FSA-head-Gordon-Brown-helped-fuel-banking-crisis.html0 -
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