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Boe Softens Rules For Banks - Telegraph

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BoE softens rules for banks

The UK’s big four lenders will be able to reduce their cash and cash-like assets by 20pc under the recommendation, made by the Bank’s Financial Policy Committee (FPC). The excess “liquidity” could then be used “to support lending to the real economy”, it said. The FPC estimated the impact of the rule change on the big four to be “around £70bn”.

I'm really confused. Haven't they just been told to raise an extra £13.5 billion? Are these different issues?

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lending is down, so they think, give the banks a lifeline in reduced stability.

borrowers will flock.....NOT!

therefore, the "cash" will be used to prop up assets..like stocks.

They really are panicing.

Edited by Bloo Loo

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Schizophrenic convulsions over competing pressures in the economy. How to square several opposed goals and actions on lending, bank stability via deleveraging, growth and household debt levels against a housing bubble.

Real Living Wage Jobs.....simples. ;)

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Real Living Wage Jobs.....simples. ;)

Edit to say:.....without future promises attached.....up to individuals to make their own future promises themselves from the money they earn today.....not for the future to pay past promises they have enough of their own to contend with.

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Schizophrenic convulsions over competing pressures in the economy. How to square several opposed goals and actions on lending, bank stability via deleveraging, growth and household debt levels against a housing bubble.

The model is sound ... the model is sound ... we just need to add a few more epicycles, then everything will fit ... the model is sound ...

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The model is sound ... the model is sound ... we just need to add a few more epicycles, then everything will fit ... the model is sound ...

Yeah, pretty silly really. The Financial Stability Report is a bearfest, a third of commercial property lending (which in turn represents 40% of bank's total) is subject to some sort of forbearance, and banks are refusing to reposses due to the losses implied. It's all there in black and white, just a complete sham.

Mervo thinks this can all be resolved without cost except time.

Every month, we move further away from some sort of optimum situation. At some point, if the future is not Mad Max, we'll have to take a step in the right direction with monetary policy. But when..?

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Yeah, pretty silly really. The Financial Stability Report is a bearfest, a third of commercial property lending (which in turn represents 40% of bank's total) is subject to some sort of forbearance, and banks are refusing to reposses due to the losses implied. It's all there in black and white, just a complete sham.

Mervo thinks this can all be resolved without cost except time.

Every month, we move further away from some sort of optimum situation. At some point, if the future is not Mad Max, we'll have to take a step in the right direction with monetary policy. But when..?

of course, he's a banker, and one that doesnt have full control...his only job in life is to preserve banks.

No-one asks whether that is what he should be doing.

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Its almost as if the whole economy is fecked and the policy makers clueless.

Still the plates are spinning.

its almost as if the people that make things dont need the money, mainly because the lenders are letting them off past loans through forebearance.

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Yeah, pretty silly really. The Financial Stability Report is a bearfest, a third of commercial property lending (which in turn represents 40% of bank's total) is subject to some sort of forbearance, and banks are refusing to reposses due to the losses implied. It's all there in black and white, just a complete sham.

Mervo thinks this can all be resolved without cost except time.

Every month, we move further away from some sort of optimum situation. At some point, if the future is not Mad Max, we'll have to take a step in the right direction with monetary policy. But when..?

Is it by George, interesting summary, many thanks

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How is this going for lending? I hope they are hoarding it, to help buffer themselves against existing exposure.

Low inventory on market, and I'm still seeing houses sell at £700K (again more victims who can never know what they're doing and deserve misselling compo in future and loads of hpc sympathy) that I think are worth less than £200K, all things considered, in my opinion.

Confronted by most basic average-semi houses at £250K - £300K+ asking prices.

Authorities worrying only about the debtors, and trying their best to the young in massive mortgage debt (it seems like to me).

What's £240bn of mortgage debt to the banks, against trillions of equity, and thus potential of loads of new profitable volume lending against that on lower house prices?

The UK’s big four lenders will be able to reduce their cash and cash-like assets by 20pc under the recommendation, made by the Bank’s Financial Policy Committee (FPC). The excess “liquidity” could then be used “to support lending to the real economy”, it said. The FPC estimated the impact of the rule change on the big four to be “around £70bn”.

The policy was disclosed in the Bank’s bi-annual Financial Stability Report, in which it also warned that households were facing risks from the “current low interest rate environment”. “A significant cohort of UK borrowers could experience financial difficulties if interest rates were to rise during a period of subdued income growth,” the report said.

If interest rates were to rise to just 2.5pc and wages remain the same, households with £240bn of mortgage debt “would need to take some kind of action – such as cut essential spending, earn more income for example by working longer hours, or change mortgage – in order to afford their debt payments”, the Bank said, citing a survey it conducted last year.

The warning followed outgoing Governor Sir Mervyn King’s final public comments on Tuesday, when he said: “I think the idea we are about to return to normal levels of interest rates in premature, and one of the reasons ... is precisely because so many households have such a high level of household debt.”

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  • 242 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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