Northern Rock To Be Used To Ratchet Up Lending

[laurejon]

http://www.telegraph.co.uk/finance/newsbys...st-lending.html

The plan would come alongside the creation of a state-owned "bad bank which will house the major lenders' toxic assets. The Government will also unveil plans to implement Sir James Crosby's proposal to guarantee new loans to homebuyers and businesses.

When the Government nationalised Northern Rock in February last year it imposed strict limitations on the new lending of the Newcastle-based lender so it did not fall foul of the European Union's rules on state aid. Capping Northern Rock's lending also meant it could make large repayments on the £27bn the Government loaned it.

However, it is understood that the Treasury has been working on a reversal of this policy. Ministers now believe the bank presents an opportunity to increase lending as many other lenders have cut the amount of business they are doing

[bogbrush]

This is good news;

1. They can stop moaning about the banks.

2. It will become evident that the problem is now not lack of lending.

3. They will show that it was possible to run a bank worse than the bankers were.

4. Crash will foreclose on more business than any other bank.

5. The EU will arrest Brown.

[Timm]

Forming a plan for a bad bank will be highly complex, sources said, and the Government is only expected to have a blueprint ready by tomorrow or Monday.

What, they need 24 hours draft the structure of a zombie bank?

Why don't they ask Japan for a copy of theirs?

Or maybe they think they can come up with something that actually works. Yeah, that'll be it.

[RajD]

This is good news;

1. They can stop moaning about the banks.

2. It will become evident that the problem is now not lack of lending.

3. They will show that it was possible to run a bank worse than the bankers were.

4. Crash will foreclose on more business than any other bank.

5. The EU will arrest Brown.

Good points. So much for 'running Northern Rock at arm's length'

This smacks of desperation. I assume that they'll be lending to businesses that other banks have refused to lend to, i.e. those that would be perceived to be risky loans. NR will become a black hole sucking in and destroying taxpayers' money.

Edited January 18, 2009 by RajD

[simpleton]

Good points. So much for 'running Northern Rock at arm's length'

This smacks of desperation. I assume that they'll be lending to businesses that other banks have refused to lend to, i.e. those that would be perceived to be risky loans. NR will become a black hole sucking in and destroying taxpayers' money.

I think it's probably fair to say that they're pretty much oozing desperation from every pore at the moment.

However this only relates to everything they think, say, or do.

[HAMISH_MCTAVISH]

And about time.

The banks have ben charging userous rates to ration mortgages and business lending.

As they are in business to make money, it will take an extreme low rates push from a competitor to return them to normal lending standards.

NR could perform this role well. Screw the banks that want to charge ridiculous rates just to rebuild balance sheets. That's not what the bailout was designed for.

Get them lending normally again, and the recession will end. Good for everyone.

[rw42]

As they are in business to make money, it will take an extreme low rates push from a competitor to return them to normal lending standards.

And on what planet does a different business lending at a lower interest rate make it more profitable for your own business to do the same?

[Pindar]

NR could perform this role well. Screw the banks that want to charge ridiculous rates just to rebuild balance sheets. That's not what the bailout was designed for.

The bailout was designed to buy middle class votes by making their payments nice and low.

It's immoral to use taxpayers money to subsidise the lifestyles of those who could well afford to pay a bit extra.

[simpleton]

And about time.

The banks have ben charging userous rates to ration mortgages and business lending.

As they are in business to make money, it will take an extreme low rates push from a competitor to return them to normal lending standards.

NR could perform this role well. Screw the banks that want to charge ridiculous rates just to rebuild balance sheets. That's not what the bailout was designed for.

Get them lending normally again, and the recession will end. Good for everyone.

Define "normal". We reached the point a couple of years ago where if you shaved a labrador and sent him into the friendly branch of your local building society he would have trotted out with a mortgage for a couple of buy to let apartments in Manchester. It didn't matter if his only business plan was a resounding woof and a thump of his tail.

Is that what you meant?

Look. Just face it. The housing market died on it's **** the day the queues started to form outside Northern Rock, you tit - and none of your back-of-a-fag-packet calculations are likely to convince anyone otherwise.

[rw42]

The whole 'get them lending' argument really just reminds me of wiley-coyote after he's just looked down and has been running on air. He tries to run faster to stay upright.

Running full speed ahead is all well and good up until you reach the edge of the cliff. Running over it is dumb. Trying to run faster after you've looked down and crapped yourself isn't going to get you any further.

:/s/run/lend/g

[mikeymadman]

Excellent.

That's how to get people lending.

And how do they propose to get people paying back?

[Y-QUERK]

And how do they propose to get people paying back?

Paying....back?

whats that?

[Kyoto]

If 'getting banks lending again' is what they are pitching as the solution, this is surely a better mechanism for doing that than trying to do it via capitalising other banks.

It is certainly a more direct route to small businesses and consumers without giving other banks the opportunity to get their snouths in the trough.

[davidhpc]

Sounds like they need Applec unt back at the helm for this.

[bogbrush]

And about time.

The banks have ben charging userous rates to ration mortgages and business lending.

As they are in business to make money, it will take an extreme low rates push from a competitor to return them to normal lending standards.

NR could perform this role well. Screw the banks that want to charge ridiculous rates just to rebuild balance sheets. That's not what the bailout was designed for.

Get them lending normally again, and the recession will end. Good for everyone.

Desperate stuff from the NuLab apologist.

[the-sign-jacker]

they can only ratchet up lending if people are willing to borrow on overpriced burdens.

so thats wht beckett launched her prices will soon go up outburst.

cynical ugly corrupted cow.

[interestrateripoff]

This is good news;

1. They can stop moaning about the banks.

2. It will become evident that the problem is now not lack of lending.

3. They will show that it was possible to run a bank worse than the bankers were.

4. Crash will foreclose on more business than any other bank.

5. The EU will arrest Brown.

Perhaps Mystic Merv could run the bank and when he's printing the money he can then send it straight round to the front desk and lend it to the populace.

It's immoral to use taxpayers money to subsidise the lifestyles of those who could well afford to pay a bit extra.

I think you'll find that's what the taxpayer exists for to help subsidise lifestyles especially that of our MP's who work so hard on our behalf.

Excellent.

That's how to get people lending.

And how do they propose to get people paying back?

Paying money back??? What on earth are you talking about you never pay the money back just keep rolling it over into a ever larger amount with smaller monthly payments. This is how big companies work which are run by the best business minds and if it's good enough for them it's good enough for everyone else.

[mikeymadman]

Paying money back??? What on earth are you talking about you never pay the money back just keep rolling it over into a ever larger amount with smaller monthly payments. This is how big companies work which are run by the best business minds and if it's good enough for them it's good enough for everyone else.

I'd like to apologise for my earlier ouburst.

I'm very sorry, it was wrong of me to make such a disgraceful suggestion as that people might pay back a Crock mortgage and I won't do it again. I couldn't have been feeling well at the time. Sorry.

[SleepyHead]

Could this start another run on Northern Rock? .....and every other bank for that matter?

[symo]

Now would be a good time to report this to the EU competition commission, state owned bank undercutting rivals, except everything is state owned apart from the Nationwide.

[flash harry]

And about time.

The banks have ben charging userous rates to ration mortgages and business lending.

As they are in business to make money, it will take an extreme low rates push from a competitor to return them to normal lending standards.

NR could perform this role well. Screw the banks that want to charge ridiculous rates just to rebuild balance sheets. That's not what the bailout was designed for.

Get them lending normally again, and the recession will end. Good for everyone.

Awwwooooga

[delboypass]

Can someone remind me why the Government had to nationalise Northern Rock in the first..!!!

Oh thats right because they gave out dodgy loans including 125% morgages, 100% morgages and self cert morgages without checking any of the paperwork..

Well blow me down...why doesnt Labour just start up that debt generator again...

Jesus i do despair at the looneys running the asylum...!!

LET HOUSE PRICES COLLAPSE AND START AGAIN FROM A SOLID BASE!!!

We are already paying for it anyway!

[Sonic the Hedge Fund]

NR could perform this role well. Screw the banks that want to charge ridiculous rates just to rebuild balance sheets. That's not what the bailout was designed for.

Bankrupt all the banks that were baled out, by undercutting them with even more dodgy (taxpayer funded) lending!

I have to agree the plan is quite ingenious, the whole country and the government will be bankrupt in no time at all.

Houses will be free to anyone with a shotgun!

[steve99]

And about time.

The banks have ben charging userous rates to ration mortgages and business lending.

As they are in business to make money, it will take an extreme low rates push from a competitor to return them to normal lending standards.

NR could perform this role well. Screw the banks that want to charge ridiculous rates just to rebuild balance sheets. That's not what the bailout was designed for.

Get them lending normally again, and the recession will end. Good for everyone.

Lending normaly? like pre 2000 without the self certs, or pre 1987 sort of lending? Or do you think bulblenomic type lending is normal?

Paying money back??? What on earth are you talking about you never pay the money back just keep rolling it over into a ever larger amount with smaller monthly payments. This is how big companies work which are run by the best business minds and if it's good enough for them it's good enough for everyone else.

I agree, just like the private equity firms that load up their 'soon to fall apart' targets with debt, redundancies and asset stripping. Or sort of like Enron, or that Indian IT scam company. Best run means, Best run for the managment, how quick they can load their pockets before passing the parcel. Seems its too late for the amatuers to pass the parcel and will now have to pay back for ever more, that is, if there is such a thing as natural justice.