Britain’s financial watchdog has warned consumers that the era of cheap credit may have come to an end. The US sub-prime crisis has led to banks across the globe tightening credit standards, with increased interest rates and lower loan to value mortgages on offer.
The way in which banks wrote loans and then sold them on as assets to other institutions has caused widespread uncertainty in the banking sector, with confusion as to where the risk lies.
The Financial Services Authority has urged banks to revert to simpler methods of funding their lending . However, there are no plans for the FSA to change their regulatory philosophy, though stricter reviews will be conducted in the future. One such review includes the impending internal report of the Northern Rock saga.
Consumers Warned Era of Cheap Loan Credit is Over
Mon, 03 Mar 2008
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