Jump to content
House Price Crash Forum
Sign in to follow this  
Blod

RBS failed BOE stress test.

Recommended Posts

14 minutes ago, nome said:

Considering what a joke these ''stress tests'' are then RBS must be in SERIOUS trouble!

Apparently these 'test' are stricter than those of the ECB. If that is true then what shape are Deutsche Bank in.

Share this post


Link to post
Share on other sites
4 hours ago, Blod said:

Apparently these 'test' are stricter than those of the ECB. If that is true then what shape are Deutsche Bank in.

Shape?

Sort of squashed grape.

Share this post


Link to post
Share on other sites
10 minutes ago, spyguy said:

Shape?

Sort of squashed grape.

The mods wouldn't allow a more accurate description.

I do wonder whether these 'tests' take into account the changes in the way credit cards implement changes in interest rates. Previously these changed annual but recently they all moved to monthly meaning if and when the rates do rise they will impact on the next bill. This will affect confidence very rapidly and result in a sudden recession.

Edited by Blod

Share this post


Link to post
Share on other sites
Just now, Blod said:

The mods wouldn't allow a more accurate description.

I do wonder whether these 'tests' take into account the changes in the way credit cards implement changes in interest rates. Previously these changed annual but recently they all moved to monthly meaning if and when the rates do rise they will impact on the next bill. This will affect confidence very rapidly and result in a sudden recession.

 

Share this post


Link to post
Share on other sites

The buy-to-let sector has been the main driver of growth in the UK mortgage market over recent years. Between the start
of 2009 and the end of 2015, the outstanding stock of buy-to-let lending grew by around 6% a year on average, compared with around 0.3% for owner-occupier mortgages. This rapid recent growth means that the vulnerability of banks’ buy-to-let portfolios to a severe economic downturn has not
been observed, so it is more uncertain than the performance of owner-occupier mortgages in a stress. In aggregate, impairment rates on banks’ buy-to-let loans are estimated to be about two and a half times higher than for owner-occupied mortgages over the five years of the stress.
In its December 2015 Financial Stability Report, the FPC observed that new loans to buy-to-let investors are often subject to less stringent affordability tests than loans to owner occupiers. The FPC remains alert to the rapid growth of the UK buy-to-let market, and any potential loosening in underwriting standards, as the sector could pose a risk to broader UK financial stability. In September 2016, the PRA issued a supervisory statement on underwriting standards for buy-to-let mortgage contracts.

Share this post


Link to post
Share on other sites
1 hour ago, Blod said:

http://www.bbc.co.uk/news/business-38135133

The only shocking thing is that the BOE is being honest, things must be a foot.

Does make you wonder. No Cameron 'things can only get better let's have help  from the government for wealthy middle class kids to buy bigger houses' pork barrel rhetoric here.

 

Austere.

Share this post


Link to post
Share on other sites

There's lots of shocking things...

UK household secured debt performed very well. Lloyds, Nationwide and Santander did well, showing the strong performance of UK mortgage-based banks

Share this post


Link to post
Share on other sites
34 minutes ago, Si1 said:

Does make you wonder. No Cameron 'things can only get better let's have help  from the government for wealthy middle class kids to buy bigger houses' pork barrel rhetoric here.

 

Austere.

3664.jpg?w=620&q=55&auto=format&usm=12&f

Share this post


Link to post
Share on other sites
1 hour ago, Blod said:

Apparently these 'test' are stricter than those of the ECB. If that is true then what shape are Deutsche Bank in.

ECB is playing the same game as BOE in '09. They are aware some banks are exposed......and they are hiding them in a deck of cards so the market doesn't have a chance to murder them!

 

I think DB is exposed, but I suspect it less exposed than the regular banking system.....Italian and Spanish banks are pretty insolvent. Credit Agri and SocGen are in the same boat as DB I think.

Share this post


Link to post
Share on other sites
1 hour ago, hi5lo5 said:

The buy-to-let sector has been the main driver of growth in the UK mortgage market over recent years. Between the start
of 2009 and the end of 2015, the outstanding stock of buy-to-let lending grew by around 6% a year on average, compared with around 0.3% for owner-occupier mortgages. This rapid recent growth means that the vulnerability of banks’ buy-to-let portfolios to a severe economic downturn has not
been observed, so it is more uncertain than the performance of owner-occupier mortgages in a stress. In aggregate, impairment rates on banks’ buy-to-let loans are estimated to be about two and a half times higher than for owner-occupied mortgages over the five years of the stress.
In its December 2015 Financial Stability Report, the FPC observed that new loans to buy-to-let investors are often subject to less stringent affordability tests than loans to owner occupiers. The FPC remains alert to the rapid growth of the UK buy-to-let market, and any potential loosening in underwriting standards, as the sector could pose a risk to broader UK financial stability. In September 2016, the PRA issued a supervisory statement on underwriting standards for buy-to-let mortgage contracts.

Wow wow wow!

Ok, so BLT is now under regulatory and tax pressure!

Share this post


Link to post
Share on other sites
1 hour ago, spyguy said:

'Lloyds Banking Group, HSBC, Nationwide and Santander UK all passed the stress test, which the BoE said hit riskier corporate loans harder than residential mortgage books.'

For now.

When BTL gets classified, rightly, as corporate lending?

 

Actually, not long at all. BLT was not considered corporate because it was mostly done by a person rather than a corporation. This was because of the obvious tax advantages.....those are gone and new tax means more people are going to move their mortgages to Ltd. Whether this will be in the corporate loan or corporate mortgage remains to be seen! However, within a few years you should see a move from personal borrowing to corporate on banks balance sheets.

Share this post


Link to post
Share on other sites

Statistical fact: cars with "BTL" "BLT" personalised number plates are 100% more likely than vehicles without these letters, to benefit from sidepanel detailing administered via housekey after dark in the area I live.

Share this post


Link to post
Share on other sites
4 minutes ago, thewig said:

Statistical fact: cars with "BTL" "BLT" personalised number plates are 100% more likely than vehicles without these letters, to benefit from sidepanel detailing administered via housekey after dark in the area I live.

Buy To Letters are fair game but I don't know what anyone would have against their friendly local sandwich proprietor?

Share this post


Link to post
Share on other sites
16 minutes ago, thewig said:

Statistical fact: cars with "BTL" "BLT" personalised number plates are 100% more likely than vehicles without these letters, to benefit from sidepanel detailing administered via housekey after dark in the area I live.

Bacon, Lettuce and Tomato.....sandwich.;)

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   88 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.