The government say they want to free up lending by pumping billions into the banks, and buying all their "toxic debt" (I hate euphemisms like this don't you? - it should say "careless losses")
Why not use the NR, which they now effectively own, or NS&I, as a vehicle to lend out new mortgage money at good rates to punters who want to borrow? This would be subject to all ye olde fashioned prudent lending criteria that applied years ago. (
or, to put it another way, why not simply let the banks fail if that's what happens and have the state create a new state-owned bank to do the lending. perhaps the answer is that the total maount of lending that is needed is bigger than th egovernment could hope to raise.
Robert
Not if you work for Northern Rock, apparently.
You'll be getting a 10% bonus.
If it has paid off more than half the money the government lent it in just over a year.The government, ie taxpayer should be making profits in another 18 months.
It has always been hard to get on the housing ladder. We married in 1956 and could not afford London prices so we moved to Scotland the following year. There all the big societies turned us down. Eventually we bought a flat and got a 100% mortgage at slightly more than the going rate from a small building society. After nine years we had paid off that mortgage and moved back to the London area at a time when Southern prices had suffered a drop. During the 28 years we lived in that house I suffered three redundancies in other slumps and interest rates soared from an initial 4.25 to double figures. Most of my wives young relatives got in their cars and drove until they found an area they could afford to live in. As a result her relatives are spread over Kent and Bedfordshire. Derek
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As they eventually will from the other banks they are supporting from interest charged and one fine day they will unload their holdings to an eager public. Derek
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In message of Thu, 22 Jan 2009, DerekF writes
Goodness! - How many wives do you have :-)
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