Tuesday, September 4, 2007

How long will this credit crunch persist?

Banks squeeze City cashflow in worst lending crisis since 1998

Demand among commercial borrowers has remained strong despite the increasingly tight credit market, with the result that rates have increased. Housing economists believe UK mortgage rates will begin to rise if the situation persists as banks pass on the extra costs of lending to consumers.

Posted by in the delhi @ 02:51 PM (358 views)
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One thought on “How long will this credit crunch persist?

  • See previous article on Alliance and Leicester and then read:

    “However, the spotlight fell yesterday on Germany’s state-owned Bayern LB, the country’s second-largest regional bank, which admitted it had a €1.9bn (£1.3bn) exposure to the US sub-prime mortgage market.

    The Landesbank, owned by the wealthy state of Bavaria and by Bavarian savings banks on a 50-50 basis, insisted it had liquidity to cover any potential losses. It said 80% of its investment was in triple-A rated funds and 20% in double-A rated loans. But these ratings are at risk of being downgraded.”

    I know the German’s went for this re-packaged debt in a big way, but some regional bank has £1.3bn exposure when A&L have only £175m? And the above points out how stupid the A&L statement about all their debt being AAA rated was too.

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