Tuesday, Nov 25, 2008
Mervyn gets his whip out for a jolly good spanking
BBC NEWSSSSsssss: Governor warns banks on lending
"Mervyn King has warned that the UK economy will go into "a steep recession" if the commercial banks don't resume normal lending levels."........whats a normal lending level then Merv?
Posted by titaniccaptain @ 06:00 PM (1134 views) Add Comment
18 Comments
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1. paul said...
Well perhaps if Mervyn King had chosen an inflation measure that included the runaway house price inflation, and cracked the whip over the MPC a couple of years ago instead of lowering rates to "solve any problem they came up against", the banks wouldn't have found themselves running up the curve of credit-fuelled spike in asset prices, and would not have overcommitted themselves to danagerously high levels of leverage.
Which should, of course all be well known to Mervyn King and his fellow MPC members, who were warned by Eddie George in 2003 that their low interest rate policies would stoke an asset price boom (the rest of use only found this out last year of course when it was disclosed in a Treasury Select Committee interview).
2. handle_it said...
Banks won't lend because the know assets are still over-valued. We can't avoid the correction. If it ain't hurting it ain't working - as the saying goes...
3. fjcruiser said...
why should we trust the so called experts now when they have been ignoring all the warning signs for years.
4. jackas said...
Funny this....wasn't too long ago Merv was saying banks should resume normal lending levels because they were too high.
I used to like Merv.
5. titaniccaptain said...
well said fjcruiser
There are more experts on this site than in anywhere else.......As I have said before the wealth of talent on here is diverse and would make the greatest board of directors that any company has ever seen......
6. icarus said...
Merv's swerves usually end up with his backing his political masters, and they could never say 'let deleveraging commence'.
7. plato said...
I think we can expect to see overall government control of the banking system during the following year. Mervyn is paving the way with statements intended to both warn the banking sector and justify the political actions that will ensue. The banks cannot possibly hand out the bail-out funds used to save them without putting themselves in jeopardy again. He knows this and that there is no possible return to 'normality'. IMO They cannot act individually and will not support each other,so government will effectively join them into a single entity,practically speaking, that will essentially work for politcal purposes. 'Free Market' is now merely a mirage.
8. goweresque said...
Is Mervyn King really that stupid? Or has he got the Darling/Brown hand up his backside? Even he must know that the level of lending that was occurring in the binge years could in no way be considered 'normal'. If we went back to the level of 5-6 years ago, that could (and I stress only could) be considered normal. And that will in no way sustain the grossly over-inflated debt bubble we have now. For the govt to somehow force lending back to the levels of 06/07 would be utter madness - for the lenders, for the people borrowing, and for the nation as a whole. What is he playing at?
9. renting2 said...
I've read more sense in the last 8 comments than in whole rafts of HMG / Treasury and BoE pronouncements.
10. enuii said...
I'm sure at the back of his mind Mervyn fully realises the consequences of falling foul of the political masters of this country and does not want to end up like a certain government scientist.
11. denzil said...
So then, wasn't one of the conditions of the bank bailout that lending returned to 2007 levels?!? Oh silly me, I forgot, the huge levels of debt being forced on the tax payer (bailouts etc) are little more than Labour getting the public to pay the bill for a popularity campaign which may just mean they have a chance of getting re-elected.
Complete and utter con!
12. vindicated said...
What renting2 said....
And...
It never fails to amaze me... in fact, it beggars belief how I feel like even I am beginning to make more sense in my daily grumblings about the economy than the bl**dy BoE governer and the entire sodding government!!! Geez... and me, a mere woman! (sorry Bellweather if you're out there... I had to have a dig, just for fun you realise!). I think I need to quit reading posts on this site and get back to what I should apparently be good at... shopping! That'll fix the whole sorry shambles..... or so I'm told........ ;o)
13. sold out said...
i am sure he is talking about lending to businesses and not morgage lending.
"Meanwhile, Chancellor Alistair Darling told the BBC that the situation was "urgent", saying more banks needed to "step up to the mark" and increase lending to small firms"
None of the banks will lend money at a good rate to anyone to buy property unless they have at least 20 to 25% deposit because they know that property is going to fall by at least that ammount next year.
The morgage market has changed for good (IMO) and the goverment can huff and puff all they like it but it will not change a thing.
14. Yorkshire_lad said...
sold out said...
i am sure he is talking about lending to businesses and not morgage lending.
If thats the case, how are these companies going to repay the loans if they arent selling things in the numbers like they used to. Surely its better to not lend to certain businesses, especially those that may fail anyway with or without bank loans.
15. Luckyjim said...
Strange that the big stick is the threat of nationalisation. Meanwhile Northern Rock continues to price itself out of the mortgage market with the government's blessing.
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