My advice particularly applied to lenders that hold portfolios they bought from providers whose objective was to lend as quickly as possible and securitise.
Now Moody’s has downgraded several building societies’ credit ratings.
This hits at two of my passions. First, being a fan of mutuality I am concerned that the reputation of many regional societies is being adversely affected by the activities of a few of their less prudent competitors.
Second, consumers will suffer. It is inevitable that downgraded credit ratings will ultimately mean that such societies find the cost of their funds increasing.
It’s time for a fightback but what is the Building Societies Association doing about it? A plan must be formulated and soon.
First, all mutuals should understand what they hold on their balance sheets through independent analysis.
Then the BSA should put together an effective marketing plan to sell the strengths of the mutual sector to regulators, government, consumers and, of course, ratings agencies.