CRUNCH SET TO CONTINUE; Warning gloom could last to 2010.THE credit crunch Credit Crunch An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporations thereby driving up the price of debt products for borrowers. could last another 18 months, the head of Britain's largest mortgage provider said today. Andy Hornby, chief executive of HBOS HBOS Halifax Bank of Scotland , told a national news programme that house prices were not likely to rise again until 2010 while lenders waited "to give the confidence back into the system for banks to start lending again". Mr. Hornby - whose bank owns the Halifax and Bank of Scotland Bank of Scotland plc is a commercial and clearing bank, based in Edinburgh, Scotland. With a history dating to the 17th century, it is the oldest surviving bank in what is now the United Kingdom, and is the only commercial institution created by the Parliament of Scotland to - said British banks would continue to suffer major problems in offering loans until they could raise significant sums on wholesale financial markets once again. The HBOS chief said that US money-market investors would not resume channelling of money to UK banks for mortgage-lending until US house prices started to recover - a process that he said was set to last well into 2010. Mr. Hornby said: "My personal view, for what it's worth, is that it will take 18 months to play through the system. "It's going to take 18 months before US house prices have started to rise again - which is what's required for banks to have the confidence to start lending again - it will take a long time to play out." |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion