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Market fixing is an old and failed idea


The Financial Services Authority is to assume some responsibility for macroeconomic monitoring, although you might think this is a job for the Treasury or the Bank of England.

But I suppose three inputs are better than one, and there’s probably a joint economic stability taskforce on the lookout for signs of the housing market overheating right now.

But how will this mechanism work? For example, if the housing market overheats, do those monitoring macroeconomic trends tell the Monetary Policy Committee to up interest rates or does the Bank or the FSA cap mortgage credit on a month-by-month basis?

Back in the 1970s, in the wake of a feast-to-famine scenario in the mortgage market, the government talked of creating a mortgage stabilisation fund.

This would be built up when rates were comparatively low and drawn on when rates rose against building societies – which had a monopoly at the time – and their inflow of funds shrank.

This was never implemented. Instead, societies agreed to a scheme which was implemented through the Joint Advisory Committee on Building Society Mortgage Finance.

This comprised representatives from the government and societies, and fixed a monthly mortgage lending figure to contribute to the stability of property prices and allow builders to plan ahead. It didn’t work and was abandoned in 1979.



Credit Adjudicator plan will not work

Following the introduction of a Credit Adjudicator in the Budget the executive task force has now been unveiled, led by Alan Sugar. The adjudicator will fast-track complaints by smaller enterprises that feel they have been unfairly turned down for credit by banks and examine lending decisions. It will have legal powers to enforce judgements if […]

Intermediary lenders close the best buy gap

Direct-only lenders continue to dominate the best buy tables but intermediary lenders are starting to close the gap, analysis from Evaluate Technologies shows. Evaluate ranked 150 mortgage deals across all product categories. Each time a lender appeared in the top 10 in the three months to March 31 they were awarded a point, with the […]


Knock Knock!

No, not the beginning of a joke………it’s the ever increasing sound of heads banging against a wall in frustration.

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Auto-enrolment — don’t leave it too late…

With auto-enrolment (AE) well under way for the UK’s largest businesses, over the next three years an additional 800,000 smaller employers (with less than 60 employees) will start their journey to comply with the legislation. AE mandates all eligible employees and their respective employers to make regular pension contributions into a qualifying pension scheme. To learn more about the legislation read our brief Jelf AEase — simple steps to AE compliance guide.


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