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Fsa To Reintroduce Credit Controls?

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According to the Telegraph Report of Turner's Mansion House speech:

Britain is to wind the clock back 30 years to an era of credit controls in an effort to stamp out speculative bubbles and protect consumers from crippling levels of debt under the most extensive overhaul of financial regulation in a generation.

Regulators will have the power to cap mortgages, limit credit to real estate investors, and force banks to restrict lending under powers that echo the 1980s – the last time credit could be switched on and off by a central watchdog.

Will be astonished if this actually gets put into practice...

more at the link, including such gems as:

He added that regulators, hooked on "the simplistic assumptions of the past" such as the belief that inflation targeting would "automatically deliver financial stability", were more to blame than bankers for the crisis.

"We need to move beyond the demonisation of overpaid traders and their unnecessary CDO squareds, to recognise that, in finance and economics, ill-designed policy is a more powerful force for harm than individual greed or error."

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Full text of the speech at the FSA website.

including:

The crisis had many causes – including those on which popular attention often focuses. There were some absurd bonuses for excessive risk taking: there was an explosion of exotic product development which last year I labelled as ‘socially useless’, a phrase from which I in no way draw back. There were failures in risk management practices and systems which top management and boards should have put right, and which the FSA, as we have openly admitted, should more aggressively have challenged.

But underlying all of these problems, and far more fundamental, were prudential rules and an entire philosophy of market regulation – embraced by policy makers throughout the world – which failed to identify and adequately address the dangers of excessive leverage and maturity transformation, and which too confidently relied on supposedly efficient and rational markets always to produce good results.

what I think many commentators fail to consider is the dilemmas we face in getting out of the hole into which we should never have fallen. We allowed an excessively risky system to develop, with over-leveraged financial institutions, providing in some markets too much credit too cheaply, and based on risky maturity transformation. It failed and was rescued with exceptional public support. The challenge now is to wean it off that exceptional public support and make it robust for the future while still enabling it to supply adequate lending to a still fragile economy.
The full toolkit to achieve that constraint [by the new Financial Policy Committee (FPC)] is still to be defined. It will certainly include countercyclical capital buffers, increased to slow down excessive credit growth, reduced to support lending in recessions. It could include their variation by sector – constraining commercial real estate lending more than other categories: and it may need to include limits on allowable contracts, such as maximum loan-to-value ratios, rather than constraints imposed solely on aggregate lender balance sheets.
Taking away the punch bowl, however, will not always be popular. At various points in the cycle it could mean restricting mortgage credit when individuals are buying houses in a rising market, and limiting credit to real estate investors who enjoy the rising prices which easy credit itself helps produce. It means slowing down credit booms which, as long as they last, make governments popular and swell their tax revenues.
And following our Mortgage Market Review, we propose to significantly strengthen the requirement for lenders to assess the affordability of mortgage loans, rather than assuming that informed customers and prudent lenders will always reach sensible decisions, an assumption sadly contradicted by some pre-crisis lending.

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According to the Telegraph Report of Turner's Mansion House speech:

Will be astonished if this actually gets put into practice...

more at the link, including such gems as:

Very interesting. Thanks for posting it. Very good news.

I think they will implement, at least some controls. Democracies do learn, after all, but Jeeesus it is slow, fecking hell...

Oh well, all other systems are even worse, etc...

But god almighty it is frustratingly slow, glacier pace.

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Full text of the speech at the FSA website.

The full toolkit to achieve that constraint [by the new Financial Policy Committee (FPC)] is still to be defined. It will certainly include countercyclical capital buffers, increased to slow down excessive credit growth, reduced to support lending in recessions. It could include their variation by sector – constraining commercial real estate lending more than other categories: and it may need to include limits on allowable contracts, such as maximum loan-to-value ratios, rather than constraints imposed solely on aggregate lender balance sheets.

BTL is commercial of course, we just have to hope the FSA see it that way too ;)

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may.....could............should..........if.......might..........

4 yrs on and the new boy paid for by the banksters tells us not to blame the banksters for being crooks, stealing all the money, then passing the bill to the poor.

Same tired old rhetoric I'm afraid.

Horse. Door. Bolted. (But I'm sure he's getting a nice fat salary and a bonus for looking earnest)

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oh, oh, oh...

a moment of silence please for those who never get the chance

they show up to the party but they're never asked to dance

the losers the liars the bastards the thieves

the cynicists, the pessimists and those that don't believe in nothing

they said "a pox

upon your house

upon your family and everyone you knew

and everyone you'll ever meet"

i bet they think we wish we joined when we could

but we do what we want we don't do what we should

now everybody's laughing because they're thinking they in on something i don't get

don't forget

i connect and i read every word you said

like a child who believes he was wronged

if you hate me so much then stop singing my songs

Link

Edited by Saving For a Space Ship

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Don't hold your breath waiting for the FSA to do anything sensible about lending. They are so financially astute last year they went into the red themselves and needed to draw on a £200m credit line from the High St banks. (Yes - those people they are supposed to be regulating!)

http://www.independent.co.uk/news/business/news/banks-lend-163200m-to-cashstrapped-fsa-1766006.html

What have they achieved since the credit crunch started? Just lots of reviews and consultations with their banking masters that are always going to bring about change but never actually get acted upon. "Tomorrow" never comes. Nero fiddled while Rome burned and you could argue they have done the same 125% LTV mortgages, Self Certs, Interest Only - all things they didn't try prevent but are now supposedly against.

Actually NERO could be used to describe the FSA - Non Effective Rubbish Organisation.

Yet according to information around the Panorama program this week Hector Sants is allegedly on £795,192

http://www.24dash.com/news/central_government/2010-09-20-Panorama-9-000-public-sector-workers-earn-more-than-Prime-Minister

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<br />Don't hold your breath waiting for the FSA to do anything sensible about lending. They are so financially astute last year they went into the red themselves and needed to draw on a £200m credit line from the High St banks. (Yes - those people they are supposed to be regulating!)<br /><br /><a href='http://www.independe...sa-1766006.html</a><br /><br />What have they achieved since the credit crunch started? Just lots of reviews and consultations with their banking masters that are always going to bring about change but never actually get acted upon. "Tomorrow" never comes. Nero fiddled while Rome burned and you could argue they have done the same 125% LTV mortgages, Self Certs, Interest Only - all things they didn't try prevent but are now supposedly against. <br /><br />Actually NERO could be used to describe the FSA - Non Effective Rubbish Organisation. <br /><br />Yet according to information around the Panorama program this week Hector Sants is allegedly on £795,192<br /><a href='http://www.24dash.co...-Prime-Minister</a><br />

NERO

Never Ending Rip Offs! :)

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may.....could............should..........if.......might..........

4 yrs on and the new boy paid for by the banksters tells us not to blame the banksters for being crooks, stealing all the money, then passing the bill to the poor.

Same tired old rhetoric I'm afraid.

Horse. Door. Bolted. (But I'm sure he's getting a nice fat salary and a bonus for looking earnest)

Agree 100% Frank. It's beyond sad. :rolleyes::rolleyes:

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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