Friday, November 23, 2007

Vince Cable challenges banks to find solutions (or else)

How Britain can avoid a subprime disaster

One possibility is allowing those in arrears because of circumstances beyond their control to move to shared ownership arrangements. Another is to move to active management – by the Bank of England – of bank reserves so that requirements are tightened in periods of boom and relaxed in recession. There is also the question of whether “light touch” regulation can survive when banks depend for their survival on “lender of last resort” privileges rather than the more brutal disciplines facing other companies.

Posted by tick tock @ 01:43 PM (775 views)
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5 thoughts on “Vince Cable challenges banks to find solutions (or else)

  • So reckless borrowers and unwise lenders should be bailed out. Do we now protect those who have mewed to buy second homes and holidays? Who is going to pay? Those few left a work.

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  • How can Britain avoid a subprime disaster?

    Only way out of this one is to quickly rename the country.

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  • Shared ownership?

    Thats the absolute last thing a Bank needs during a credit crunch- It would reduce their capital reserves and they would need to make this up in other ways to maintain their ability to lend and meet capital adequacy requirements.

    NO its a non starter.

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  • I first saw this point made in Private Eye of all places.

    You cannot have “light touch” regulation and allow banks to run for help and get it when they miscalculate risks. It’s all carrot and no stick!

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