P.I.G.S.

Is the cost to the banks of the likely amount they will lose on their mortgage books not built fully into their current funding (well, let's continue to pretend)? This being the case, why the need for the government to get involved or for extra taxes for this purpose? It is in the bank's interest to crystalise losses on each distressed mortgage as quickly as possible, the longer you leave it (3 years to get a court settlement) the more opportunity for anyone who has given up to squirrell funds away. Dealt with on an individual basis leaves room for being ruthless with chancers and compassionate with genuine cases. A nod from Michael Noonan that he would like the banks to start behaving in this manner should be enough, Leo can add his weight behind it if it isn't. Putting a legislative structure on the process will leave an opening for cute whores to dump more than their fair share of financial responsibilities on the unwitting taxpayer, and leave the naive shat upon from a great height.
 
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3. Mortgages in future limited to 3 x first income, 1 x second incom
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The more you restrict availabilty of mortgages, the more the market becomes skewed towards cash buyers (prices wiill be suppressed and it would become more attractive to them ) and you would get a swing towards landlords and rental. I think the above is too tight

although some seem to think that a heavy rental market somehow great because the germans do it (and taht is possibly a consequence of their credit availability), i dont
 
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All very well asking the state to subsidise those that overextended their buying but ultimately its the taxpayers (ie those that borrowed within their means) that would have to pay.
 
Mortgages shouldn't be given to people who may not be able to pay them in the future. If this is done in large size, you get the Irish mess. Seeing as banks are clearly too greedy to resist this, and consumers are too stupid to realise this, regulation is necessary in financial markets. Ultimately all of this is about not only stopping people doing stupid things, but protecting depositors so that you don't have to get the government standing behind banks (which is ludicrous, really).
 
ortgages shouldn't be given to people who may not be able to pay them in the future
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Thats everyone

Obviously the multiples of 7 times and 10 times joint salaries are stupid as was self certification and the sub prime mess in the US. But what you have suggested is far too far the other way. A mortgage of three times one salary and one times partner is easily affordable for loads of people and they should be allowed to go higher.

Your multiples would make it impossible for just about anyone to get on the ladder (in the UK anyway) would knock the bottom out of the market leaving it ripe for the cash buyers to mop up. In some ways this is already happening now with the banks present self imposed restrictions

I also believe that banks should be able to take a view on future earnings of young purchasers too and perhaps offer lower rates rising as their salaries increase. A trainee accountant with a big four firm would be a nailed on prospect for a much higher future income for instance
 
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I also see no more reason why an over extended borrower should be bailed out by the goverment than an entrepeneur (more useful to the economy of course) whos second mortgaged and also been hit by the recession.
 
A mortgage of three times one salary and one times partner is easily affordable for loads of people
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That's the idea.

would knock the bottom out of the market leaving it ripe for the cash buyers to mop up. In some ways this is already happening now with the banks present self imposed restrictions
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Not sure I understand the cash buyer stuff. Why is that so bad? It sounds bad, but I am not sure I agree with you.

I also believe that banks should be able to take a view on future earnings of young purchasers too and perhaps offer lower rates rising as their salaries increase. A trainee accountant with a big four firm would be a nailed on prospect for a much higher future income for instance
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This is all well and good, but banks have shown that they are too greedy to do this with any restraint.
 
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Bar the Bull said:
This is all well and good, but banks have shown that they are too greedy to do this with any restraint.
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Too right.
Also, the sooner the banks have to split between banking and investment, the better.
They bought up merchant banks & investment houses & hedge funds like crazy. Then relied on the protection needed for the banking side which was & is inextricably linked to the cocked up side.
Thus, their shareholders were well & truly on to a win to nothing - more or less.
Moral hazard? What?

Basel II what a con's charter.
 
Its stinks of typcial left wing state knows best rubbish BTB

A couple earning 40k each would only be able to borrow 160k under your scheme

They would be bringing home around £5k a month jointly and yet their repayments wouldnt top a grand

Thats crazy. They should be free to go much higher. They really need 4k a month disposable because the state says so?


The cash buyer is clear to me. prices would certainly drop (pissing off those who had bought sensibly) because of a collapse in available buyers. That would in all liklihood soon be mopped up by buy to let cash rich buyers, because rents would probably stay the same.
 
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4. All new mortgages must be stressed at 4% over prevailing rates. No more than 35% of after tax income should be paid in mortgage repayments after
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This is a nonsense too. What if someone is on a particularly high salary but doesnt require a high disposable income? Say they earn 200k a year? and take home around i dunno, 12k a month? should they be compelled to a disposble income of 8k a month? why?

Why shouldnt they put that in property if they wish to?

Also if people have borrowed at stupid multiples they are just as responsible as the lenders. It snot impossible to work out reapayments. With current interest rates their repayments are probably less than when the mortgage was taken out anyway.
 
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"Basel II?" you ask.
Dates from 2004. Regulations set for global banking by Basel Committee on Banking Supervision (supervision = turn a blind eye.)

The prologue to 2008 & all that.

From The Economist Sept. 2010:
"the principal contribution of Basel II to the last financial crisis, namely, the calculation of risk-weights. One of the key components of Basel II was to increase the amount of capital banks had to hold against riskier assets. Extremely low-risk assets, meanwhile, could be held with very little or even no capital. Risk, moreover, was calculated primarily by reference to the rating assigned by one of the recognised ratings agencies. The consequence of this Basel II reform was to discourage banks from lending to risky enterprises, and to encourage the accumulation of apparently risk-free assets. This was a primary contributor to the structured finance craze, as securitisation was a way to "manufacture" apparently risk-free assets out of risky pools. What brought banks like Citigroup and Bank of America to their knees wasn't direct exposure to sub-prime loans, but exposure to triple-A-rated debt backed by pools of such loans, debt which turned out not to be risk-free at all."

Checking who was the country's Finance boss in power at the time?
I'll leave that to you.
 
Someone gives you a bag of goodies, certified to be top notch goodies.
Your business is to invest in goodies and not to risk your firm's goodstanding.

Do take a look in the bag?

Reckless if you don't.

That was the banks & securitised tradeables.

We can draw our own conclusions, thank you very much.
 
Rather good synopsis by the BBC's Robert Peston here:

http://www.bbc.co.uk/news/business-13956331

Damned if you're a Greece-creditor either way (default or not)!

Still think the default is the way to go.
Fudging issues, especially where the record of State over-spending is so fixed, is not the way.

But didn't they vote no to default? Read the article & find out why that makes no difference!
 
if greece defaults they will have to leave the euro. then things would get messy for the whole project which is why they are under pressure not to do so
 
Whats this then? Post hacking?

Typical leftie suppression of free expression and meddling censorship
 
There are idiots, fecking idiots and just plain fucking idiots.
I claim my prize for locating a perfect U version:

"European politicians accused credit rating agencies on Wednesday of anti-European bias after Moody's downgrade of Portugal's debt to "junk" cast new doubt on EU efforts to rescue distressed euro zone states without debt restructuring."
"European Commission President Jose Manuel Barroso said the decision to cut Lisbon's rating by four notches so soon after it became the third country to receive an EU/IMF bailout was fuelling speculation in financial markets.

dee dah dee dah

"It seems strange that there is not a single rating agency coming from Europe. It shows there may be some bias in the markets when it comes to the evaluation of the specific issues of Europe," Barroso told reporters in the European Parliament.

German Finance Minister Wolfgang Schaeuble called for limits to be placed on the rating agencies' "oligopoly."

Of the three major agencies, Moody's and Standard & Poor's are U.S.-owned and based. Fitch Ratings is headquartered in New York and London and majority owned by a French company."

Rigid heads. Do they believe their own guff?
 
If S&P and Moodys hadn't awarded AAA ratings to credit default swap packages, we might have been able to avoid - or at least better contain - the 2008 crash. The credibility of the rating agencies is shot to bits and they can all go fornicate themselves with a jagged stick, as far as I'm concerned.
 
Greece today pledged to meet its commitments to international lenders, as Russia's central bank chairman said the country was "close" to default.

Greek tossers. It's almost funny.
 
FORMER TAOISEACH Bertie Ahern has called for an investigation into the media for what he said were failures to follow the economy because journalists were more concerned with following his dealings with the Mahon tribunal.

Mr Ahern said that from the time he began evidence to the tribunal, the media “just stopped following the economy”.
In an interview on Dublin City University’s radio station DCU FM, he said: “There should be an investigation into it. They should have been following the economy from August 2007, but they weren’t, they were following me. I think a lot of these guys really should have looked at themselves.

“The government were following the economy but the media weren’t. It was a very poor job by the media really. They were shown to be incompetent and that was the trouble – everything was on me.”
 
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