Will mortgage lenders ever learn?
At first glance there might appear to be conflict between a government keen to see mortgage lending revived and the housing market repaired, and tough new controls on lenders.
But at a time when the taxpayer is helping to keep the mortgage market afloat it might be advisable for industry groups to take the punishment without too much protest.
After all at the peak of the residential boom a large proportion of lending was devoted to 'equity withdrawal' and was of no help at all to first-time buyers, the self employed or social housing.
As for sub-prime loans the Financial Services Authority data shows that 30% to 60% of these loans made by specialist firms are now in arrears. Ouch!
Anyone who has forgotten just how much assistance Britain has had to provide to mortgage lenders and bankers because of their erratic lending policies should consult a box in Alistair Darling's March Budget.
This lists a series of steps taken in the heart of the credit crunch designed to prevent a housing market implosion.
It includes the £185bn special liquidity scheme; the £150bn asset purchase plan; the direct assistance to keep mortgage lenders like the restructured Dunfermline building society afloat as well as guarantees for residential mortgage-backed securities.
The very idea that toughening regulation might somehow harm the housing market when so much aid has been given, is risible.
The National Association of Estate Agents warns that the measures 'could do untold harm to the housing market'.
Yet only last week Halifax had to subsidise the sale of its 218 estate agency branches to LSL Property Services with more than £30m - some 40% of which came indirectly from the taxpayer.
Mortgage brokers protest that 'the regulation of individual products is not the way to address perceived problems.'
Yet it was products like self-certified mortgages (liar loans), Northern Rock's Together 125% mortgage and assorted buy-to-let offers which brought the whole system crashing down. The British Bankers' Association piously warns of the risk of cutting self-employed and first-time buyers out of the market. It needs to wake up and smell the coffee.
The anger over rapacious bank behaviour has not subsided. It is the failure of light touch self-regulation which required the Financial Services Authority to come up with affordability tests for all mortgages. Lenders, brokers and agents can whine as much as they like. But they brought the heavy hand of regulation upon themselves.
›› Chart of the day: The interest-only mortgage timebomb
Sainsbury probe
On Thursday of last week, without any prior warning, the share price of J Sainsbury suddenly surged by 10%. A bullish market, ready to believe any rumours immediately pointed its finger at the grocer's biggest shareholder the Qatar Investment Authority which holds 26%. At the very least (so the rumour went) it was taking the opportunity to up its holding to 29.9%, above which it is required to make an offer to all shareholders. Or a full bid was rumoured to be on the way.
None of this was true. There was simply nothing for Sainsbury to report when it received a routine inquiry from City watchdog the Takeover Panel. Careful monitoring of the share register showed no single buyer stake building despite the intensity of speculation. The conclusion drawn was that traders, perhaps a hedge fund, had planted a rumour in the market because it was overweight in Sainsbury shares and wanted a quick turn. The matter was referred to the City enforcer the Financial Services Authority which is probing why such a thing should occur and whether there was market abuse. Experience suggests no one should hold out much hope of an answer despite the disruption caused.
Scotch mist
How marvellous that Standard Life's worldwide search for a successor to CEO Sir Sandy Crombie has produced a leader with a 'proven track record' in David Nish, the current finance director. But it might have been thought that after all the trouble Scottish companies have had as a result of appointments from their own magic circle the board might have wanted someone from outside.
Nish was finance director at utility ScottishPower when it was busy swallowing shareholders' funds in the US with the acquisition of PacifiCorp for £7bn in 1999. This deal resulted in losses of £487m on the American operations in 2001 alone. None of this was Nish's fault. But less generous souls among the investors may well wonder if Nish really is best person for the job.
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