Higher commercial lending limit for mutuals is laughable

I was surprised to read that the Financial Services Authority could potentially increase the cap - currently 25% - on commercial lending for mutuals (Mortgage Strategy Online).

Apart from one building society, the others seem to be doing okay. They are struggling to meet the fees imposed by the Financial Services Compensation Scheme to pay for failed banks and have been downgraded, but they have not managed to ruin the economy like banks have.

The sentence attributed to Adair Turner, chairman of the FSA, that the restriction on commercial lending might be justified on the ground that societies are “less likely than large banks to have the credit skills required to do good commercial real estate lending” makes me laugh.

Has he been asleep for the last year and a bit?

Torild Bastien

Indepensdent Mortgage Adviser

Iver Mortgage Company

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