Saturday, Apr 18, 2009
The building societies may be too exposed
Telegraph: Building societies ignored warnings from Financial Services Authority on lending
Building societies ignored repeated warnings from the Financial Services Authority to clean up their books without any censure, the City watchdog revealed yesterday ... Seven of the top 15 mutuals increased their commercial property books by 15pc or more between 2006 and 2007, according to data from accountants KPMG. The news strengthens the case made by a FSA whistleblower, who told Liberal Democrat Treasury spokesman Vince Cable that societies "have become highly vulnerable due to lowered asset quality, increased reliance on wholesale funding liabilities, and under-capitalisation".
Posted by quiet guy @ 12:19 PM (578 views) Add Comment
4 Comments
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1. japanese uncle said...
Is FSA something like a pseudo independent financial advisor? No enforceability? Sick joke.
2. dj2000 said...
Deluded people, they gambled and lost!
3. uncle tom said...
The difference between the sum total of property secured loans, and the value of UK savings and other assets held by the mortgage lenders, appears to be approximately £400bn.
This begs the questions: Who actually owns this debt? How much will need to be rolled over in the next year? And why did the FSA countenance such an orgy of borrowing short to lend long?
While clearly the FSA failed to do its job, the government is also culpable for not adequately overseeing the agency.
With the government happily printing money, is it realistic to expect the overseas owners of this debt to roll over the loans at anything close to a low interest rate?
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