Bank bosses downbeat on future
Two bank experts have issued gloomy forecasts for the mortgage sector over the months to come.Speaking to the BBC, deputy governor of the Bank of England Sir John Gieve said that he was "not sure" that the government would break even on its nationalisations of two lenders - Northern Rock and Bradford & Bingley.He said that this would be due to the high numbers of defaults on each mortgage firm's loan book.Meanwhile, the chief executive of Barclays told the broadcaster that he did not see a return to normal lending from UK banks for the foreseeable future.He commented: "I think that we will see the process of reduced borrowing play out over at least the course of the next 12 months maybe, maybe 24 months."[Credit available is] shrinking, it absolutely is, and that is a painful process; it's a process through which the world absolutely has to go."Mr Varley also predicted that conditions would only begin to normalise in about 18 months.
Share this..
Related stories
FSA slams controls in financial sector
The Financial Services Authority (FSA) has this week sent out a "Dear CEO letter" to 1,000 chief executives within the insurance, asset management and investment banking community demanding that "chaotic controls" regarding the handling of client assets are addressed immediately. Accompanying the letter was a report put together by the FSA over the last six months which detailed a number of major...
Read MoreStep forward Richard Branson, Northern Rock is for sale!
The UK government will later this week confirm that Northern Rock will be split into a "good bank" and a "bad bank" after expected clearance from the European Commission is confirmed. It has also been revealed that the mortgage specialist assets of the group will be sold in the short term and should raise around £1.5 billion which will be injected back into the UK government coffers.
Read More
So Who Is Talking To British Energy?
Two weeks after the supposed done deal with EDF collapsed it has been revealed that British Energy is still in talks with a mystery party with regards to a possible 'transaction'. While Bill Coley, the Chief Exec of British Energy, was unwilling to divulge further information it seems as though that party may well be EDF - despite public attempts to distance itself from the failed deal.
Was the UK government right to offer a loan guarantee to GM Europe?
The fallout from the UK government's £270 million loan guarantee to GM Europe continues to grow with some experts concerned at the timing of the move. As we approach the next general election there are concerns we are entering an MG Rover type scenario although in reality it is wrong to compare the two operations even at their lowest point. So was the UK government right to guarantee a £270 mill...
Read MoreNorthern Rock Set To Clear Overdraft In Three Years
While the financial markets continue to struggle it is the Northern Rock that has given the sector some good cheer with news that it expects to repay the full government loan in 3 years. The company forecast that 25% of the £27 billion loan will be repaid this year, 50% next year and the balance in year three. But is this really possible? In a move which can account for the whole Northern ro...
Read More