At a time of credit squeeze on the one hand and falling house prices on the other you would expect a bank to tighten its lending criteria. We used to say, when I was in banking some years ago, that if you had to force the sale of a property and go to the expense and delay of getting its owners out, the most you could lend was 70% of its value. Given property prices are falling it doesn't take much sense to see that the ratio should be around 60%.
Until last night, Northern Rock were lending 125%, double what is prudent and considerably more than what is barely sane. Until last night! And Gordon Brown says it has a healthy loan book, but until his defeat in the Lords, didn't want us to be able to find anything out about our investment under the Freedom of Information Act.
What have they got us into? I would remind readers that I pointed out last year that this had been done to save jobs in a Labour heartland. How much is each of these votes going to cost us?
No comments:
Post a Comment