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Between the Lines: Controlling credit is key to solving financial crisis

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Published Date: 28 November 2008
By Peter Jones
SIR James Crosby's report to the Chancellor on how to get mortgage finance moving again is not light reading. But it was clearly essential reading for Alistair Darling as he announced this week that he intended to implement all the report's recommendations. Reading through it, I can see why. Without the actions Crosby recommended, mortgage loans may disappear, causing untellable economic damage.
The report underlines why the ability to borrow and lend is so important to the modern economy and why getting borrowing and lending moving again is hugely important.

But I worry that in rushing to apply some extremely expensive bandages to the br...



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  • Last Updated: 27 November 2008 8:41 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Peter Jones
 
1

A Friend of Fernando Poo,

28/11/2008 14:06:17
An easier-to-follow explanation of the mortgage mess here:

http://www.iamone.co.uk/2007/12/01/when-mortgages-buy-the-farm/

The markets are currently fixing themselves by rebalancing the amount of credit to match the amount of deposits. Darling should leave them to it rather than trying to bring back the bubble for a few months longer. That would achieve nothing but to add to our pile of debt.

As Crosby says, some of that debt will be paid down next year. We should celebrate that, not lament it.

Brown and Darling are out of touch with the new frugality. We all know we need to pay off debt and save. The very last thing we need is for the government to land us in more and more debt as we try to do that.


 

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