Should the regulator get involved with mortgage pricing?

We touched on this topic over on MyHome.ie last Friday in our weekly blog contribution to their site.

It is important to look at this from a few perspectives

1. Regulation and the role of the Regulator 2. Past decisions by the Regulator 3. Politics and policy

1. Regulation and the role of the Regulator: The idea of regulation is not for price control, rather it is about prudential control. As galling as it seems to everybody, the Financial Regulator is not (nor should they be) empowered to tell banks what prices they can charge. This is sickening given that we have spent €10,000,000,000 this year alone via the NPRF in supporting our banks (€8.8bn to AIB and €1.2bn to Bank of Ireland).

Readers, if you know of other jurisdictions where regulators set prices please let us know! The idea of a Regulator is that you pay for them …

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A tale of two commissions.

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.

Some of you may recognise this line from ‘A Tale of Two Cities’ by Charles Dickens, however, I am not a classical scholar, instead it sums up my monetary sentiments for 2008. On one hand we are seeing property prices [the very foundation of the majority of Irish wealth] wither away, as global conditions worse, especially in the USA where house prices are now falling quicker than they did during the Great Depression.

There has been more than a few articles in this blog about the current issues in the broker market, the description I would use to describe it at the moment tends to modulate between ‘ugly’ and …

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The Credibility Crisis

I have written before about what can be termed a ‘credibility crisis’ and when I used that terminology it was in reference to the collapse of Bear Stearns and the fact that Alan Schwarz had said on a Tuesday that there was no problems with the bank (reminding me of the Alfred E. Neuman ‘what me worry?’ pictures) and then come Friday they were nose-diving into closure.

Credibility is a large part of what the worldwide financial crisis is about, and how that plays itself out in the market is something that should concern everybody because the foundations of any economy are not just the laws or the constitution but instead they are also the financial and economic management structures.

Solicitors of the world may disagree with me however, I would argue that wealth of itself has little to do with civilisation and advancement, because countries like the Democratic Republic of Congo, Nigeria, and Iraq are incredibly wealthy nations in terms of what they potentially have but due to money not flowing (and political corruption of the economy) they will …

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All animals are created equal, but some are more 'equal' than others

The title of todays post is of course from George Orwell’s book ‘Animal Farm’ and in it the Pigs used this rationale to place themselves above the rest of society, the Pigs wanted one set of rules for themselves and another set for everybody else. And in the end the Pigs reigned supreme, the behavior of the Pigs was amiable in the early days, but it wasn’t long before there true colours came out.

Finance of course is a separate matter but I think that George Orwell struck on a common chord in his view of Socialism because when we see any sector of business society start to treat others less ‘equally’ it is reminiscent of how the Pigs fared, and the fact that although in the short term the Pigs might have the upper hand, that ultimately they end up on the table as pork chops.

I have the misfortune of seeing imbalance starting to creep into brokerage, in the UK it has started already, Halifax, Nationwide, and Cheltenham & …

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All animals are created equal, but some are more ‘equal’ than others

The title of todays post is of course from George Orwell’s book ‘Animal Farm’ and in it the Pigs used this rationale to place themselves above the rest of society, the Pigs wanted one set of rules for themselves and another set for everybody else. And in the end the Pigs reigned supreme, the behavior of the Pigs was amiable in the early days, but it wasn’t long before there true colours came out.

Finance of course is a separate matter but I think that George Orwell struck on a common chord in his view of Socialism because when we see any sector of business society start to treat others less ‘equally’ it is reminiscent of how the Pigs fared, and the fact that although in the short term the Pigs might have the upper hand, that ultimately they end up on the table as pork chops.

I have the misfortune of seeing imbalance starting to creep into brokerage, in the UK it has started already, Halifax, Nationwide, and Cheltenham & …

Read More →