7 April 2008: The last of Lehman
Our first issue of April 2008 was all about America. Specifically, Lehman Brothers had stopped lending, causing fears of further impacts on US banks’ Blighty-based operations. If that was not enough, the market was contracting quickly as UK lenders scaled back new business. The market reacted to all this with grim determination and a touch of gallows humour.
7 April 2008: BoE called for overhaul
This story from the Bank of England foreshadows several issues that would later become prominent, including the need for banks to hold more capital and a call for a ‘gradual reduction in interest rates’. At the time, rates were at 5 per cent; by the end of that year they were 2 per cent; and by March 2009 they had fallen further, to 0.5 per cent.
21 April 2008: US rumour mill in overdrive
Following Lehman’s closure to new business, rumours spread that several US sub-prime lenders were to close or pause lending. At the centre of this speculation were Lehman-owned Southern Pacific Mortgage Limited and Preferred Mortgages, and Merrill Lynch’s Mortgages PLC and Wave. The speculation proved correct within months…
14 April 2008: Credit crunch comedy
A decade ago the liquidity crisis was in full effect. The credit crunch had turned off funding for many UK lenders, and they reacted by scaling back lending, particularly remortgages. But it was not all doom and gloom. Our cartoon from the time displays the proud British trait of cocking a snook at catastrophe.
14 April 2008: Telephone torment
The more things change, the more they stay the same, as the saying goes. Here, a broker wrote in to Mortgage Strategy to vent his spleen about a growing trend of being kept waiting on the phone by lenders. He also bemoaned lenders that claimed to be brokers’ friends but did not always back this up through their actions.