Saturday, April 18, 2009

Governments special liquidity scheme runs into new problems with downgraded building societies

Bank of England holds crisis talks with seven building societies

Recent credit-rating downgrades of building societies last week threatens to breach the terms of the government’s Special Liquidity Scheme, the Chelsea has already breached the terms of the scheme and others namely the Yorkshire, Skipton, Coventry, Newcastle, Norwich & Peterborough and Principality are in danger of breaching the terms of the scheme annd may be forced to hand back cash to the Bank of England. The six have 30 days to negotiate a deal with the ratings agency Moody’s and the regulators.

Posted by enuii @ 10:24 PM (1436 views)
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5 thoughts on “Governments special liquidity scheme runs into new problems with downgraded building societies

  • little professor says:

    See also:

    Don’t Panic!
    http://www.timesonline.co.uk/tol/money/savings/article6121156.ece

    Savers were last week urged not to panic after ratings agency Moody’s downgraded 12 banks and building societies.

    Nationwide, Abbey, Alliance & Leicester and Standard Life Bank were among those downgraded amid fears over rising bad debts, based on a scenario of a 40% peak-to-trough fall in house prices. Here, we answer your questions:

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  • Prices are stable, the economy is strong, inflation is low and house prices go up for ever, having p-e-r-s-o-n-a-l-l-y eliminated boom and bust.

    Anyone remember how 2006 felt?

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  • Moody’s report last week was based on the “assumption there would be 40% falls” (Quote FT) So what will the lenders do? Moody’s said it was up to the lenders to PROVE them wrong, but what options do they have beyond maintaining a policy now of sensible lending?

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  • inflation is eating my savings says:

    RIP Steady Eddie.

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  • post 2, sneaker

    I like it (first sentence)

    Remember 2006? Yep, I was working far too hard in 2006 working 70+ hours a week, jacked it all in and now got used to 7 day weekends!!

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