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Bankers question Brown's mortgage plans



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Published Date: 17 April 2008
By Martin Flanagan
SENIOR banking figures have called into question the Prime Minister's apparent demand for help for first-time buyers in exchange for a Bank of England "rescue" for the mortgage sector.
The scepticism in the banking world came amid increased speculation yesterday that it could be as early as next week that the Bank comes out with details of its rescue plan.

Banking share prices rose sharply yesterday on the back of the speculati
on. Royal Bank of Scotland, Barclays and Alliance & Leicester all closed up 7 per cent, while HBOS rose 4 per cent.

However, Angela Knight, chief executive of the British Bankers Association, poured cold water on Brown's position, warning it seemed "simplistic to suggest in return for this you can have that".

Knight added: "In current markets, banks will decide on the right credit ratings for individuals in their mortgage offers, not whether they are necessarily first-time buyers. Markets are more complex than that."

A senior banking executive agreed, saying: "To have this as a quid pro quo for an obviously necessary addition of BoE liquidity would defeat the purpose of the exercise. It would be extraordinarily difficult to achieve. The banks want to free up lots of liquidity, not just earmark the liquidity for a particular group."

Among those summoned to Downing Street by Gordon Brown on Tuesday were Sir Fred Goodwin of Royal Bank of Scotland, John Varley of Barclays, Andy Hornby of HBOS, Michael Geoghegan of HSBC, and Antonio Horta-Osorio of Abbey.

It is believed the Bank of England is crystallising plans to inject liquidity into the mortgage market by exchanging government bonds for mortgage-backed securities.





The full article contains 278 words and appears in The Scotsman newspaper.
Page 1 of 1

 
1

Paul in Oz,

Helensburgh 17/04/2008 04:24:53
love it can you give us some money and by the way you have no right to tell us what to do with that money!
2

Plodjfriss, Hammer of the Numpties,

Edinburgh 17/04/2008 04:33:26
It seems "simplistic to suggest in return for this you can have that".

It would appear that the banks want to be supplied with billions of pounds of taxpayers money in order to save them from the consequences of their own foolhardy business decisions, and yet are unwilling to accept any restrictions on their behaviour in return. In that case, leave them to it to sort out their problems themselves.
3

Scotish Exile,

17/04/2008 09:54:59
The government will roll over and give the banks what they want, for it is the banks and not governments that are running the world. Meanwhile we have to sit back and suffer from their appalling greed and incompetence. It really is a great system....when things are going well the banks make a fortune as do their deal makers, but when the brown stuff hits the fan, they expect the taxpayer to bail them out...
4

Vaccav,

Sydney and Edinburgh 17/04/2008 13:24:07
It seems a pity that there are so many juvenile comments on these boards. The banks don't run the country - anyone who has reached a position of seniority can confirm that. There isn't some mass collusion going on.

Government action would be for the good of all of us. It will hardly help the general population if there's no credit available to anyone at all. That would lead to recession, rising unemployment, and no one wants that. Sure there's been a lot of credit around in recent years and a wee bit tightening mightn't be bad - but nobody wants a recession.

I'm not too sure of the government plan, but the liquidity problem would definitely be alleviated if the government lent to each of the banks and raised the funds for this through an enormous bond issue. This would let banking activities return to near-normal, there will be no property crashes, no recessions and no unemployment.

In addition, this wouldn't cost the taxpayer. There is no bail-out of the banks occuring here. Indeed, the taxpayer could probably make a few pounds if the government charged a small margin on the loans.

And as for the juveniles and collusionists commenting on these boards - c'mon guys - let's keep it sensible, eh ?



5

ccc,

17/04/2008 14:58:14
#5 "The banks don't run the country"

You are actually the 'juvenile' one if you believe the above.

I bet you don't even know what the most powerful bank in the World is. In fact I imagine 99% of the UK population don't either.
6

Vaccav,

Sydney and Edinburgh 17/04/2008 22:20:13
C'mon, give the consiracy theories a break. If the banks ran the country then the Board of midland bank would hardly have allowed themselves to be taken over by a foreign bank.

HBoS wouldn't have come under attack from the hedge fund managers last month if the the banks were in charge. Northern Rock wouldn't have had thousands of people queuing outside it's branches if they ran the country. And Natwest wouldn't have been on the pointy end of an RBS takeover either.

If you really think the banks run the country then track down a former main board director or Natwest, Midland or Northern Rock. They'll tell they weren't in charge of the country.

 

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