The Government is planning to use next week’s budget to introduce plans to grade all mortgages in a bid to kick start the wholesale money markets. Chancellor Alistair Darling is understood to be arranging the introduction of a new system under which all mortgages are graded, with the least risky awarded a gold standard ‘Kitemark’. Investors have been reluctant to buy mortgage-backed securities for fear they contain risky sub-prime loans and this has made it difficult for banks to remove mortgage assets from their books. It is hoped that by providing investors with greater reassurance about the quality of the loans they are taking on, it will make it easier for lenders to sell on mortgages to investors. The scheme could help re-vitalise the wholesale money markets and provide banks with access to cheaper funding, which subsequently could be passed on to consumers in lower mortgage rates.
Archive for the ‘Speculation’ Category
Government plans to grade mortgages
Wednesday, March 5th, 2008Internet ban for just 3 illegal downloads
Tuesday, February 12th, 2008Film and music fans who illegally download material will be cut off from the internet under Government plans to tackle online piracy. Under proposals to be unveiled next week, users suspected of wrongfully downloading films or music will be first sent a warning email telling them to stop. If they carry on, they will be suspended. And if they are caught a third time their internet access will be cut off. Broadband companies who fail to enforce the ‘three-strikes’ rule would be prosecuted and their suspect customers’ details could be made available to the courts. A similar system already operates in France and the US and the Government believes it could work here.
I got carried away, says SocGen’s rogue trader
Saturday, February 9th, 2008The Frenchman accused of being behind a £3.7bn bank fraud admitted on Tuesday: ‘You lose your sense of the sums involved when you are in this kind of work. It’s disembodied. You get a bit carried away.’ While working as a £75,000-a-year trader for Societe Generale, France’s second biggest bank, Jerome Kerviel was gambling up to £37bn - more than his bank’s worth. It is alleged that he circumvented internal controls with stolen computer access codes and fictitious documents. However, he told investigators that the bank must have known what he was doing because of the profits he had generated previously, and suggested his bosses ‘turned a blind eye’ as long as he was not in the red. His losses were revealed by the bank on January 24. He was arrested a few days later but released on bail within 48 hours after being charged with breach of trust, using false documents and unauthorised computer access.
Rate of house price falls not seen since 1992
Wednesday, January 16th, 2008House prices are falling as quickly today as they did in the crash of the early nineties and only further cuts in interest rates will avoid a property meltdown, according to the Royal Institution of Chartered Surveyors (RICS). Its statistics show that nearly two-thirds of surveyors saw prices falling in December and virtually none say they are rising. The crunch has hit almost every part of England and Wales, while the West Midlands is suffering its fastest fall in history. However, the RICS says market conditions are better than before the 1990s crash. The coming months will be of great importance and many would-be-buyers (as well as homeowners on tracker rates) will be watching the Bank of England’s interest rate decisions while lenders remain reluctant to part with finance.
Rate cut or rate hunch?
Tuesday, January 8th, 2008The Bank of England will come under intense pressure to cut interest rates this week as figures out show that the high street suffered its worst Christmas for three years. Retailers endured another difficult day on the Stock Exchange amid mounting fears of possibly one of the toughest trading spells in recent memory. The gloom surrounding the economy may deepen if, as expected, Halifax reports that house prices fell again in December for the 4th consecutive month - making a case for a speedy rate cut. However, many economists believe that fears over inflation, fuelled by record petrol prices and rising gas bills, may force the Bank of England to wait until February or March before taking the next move down. The decision on interest rates will most definitely be a close call.
