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Lean times leave a leaner, keener core


August 9 2013 marked the six year anniversary of the start of the current financial crisis. On that day back in 2007, alarmed by banks reluctance to lend to each other, the ECB and the US Federal Reserve injected $90bn into financial markets. That day the FTSE lost 121 points and the US Dow Jones fell by 387. A month on, we all recall the memorable images of customers queuing round the block to withdraw their savings from Northern Rock.

With few exceptions, the most bearish of economists did not predict the downturn would last beyond a few years, yet six years on we are still struggling to finally extricate ourselves from one of the longest recessions on record. While there have been plenty of trying times within the last six years, it could be argued (with the benefit of hindsight) that the crash had to happen to correct a market that was threatening to get out of control, if it hadn’t already.

Lenders who are no longer with us were operating with reckless abandon and house prices were spiralling ever upwards at a rate of knots.

The subsequent fallout has been painful for all of us to deal with – for some more than others – but it was inevitable and had to happen at some stage for the greater good long-term.

As is the cycle of such events, out of the carnage came substantial regulatory change, and with the implementation of the Mortgage Market Review next April hopefully we will ensure we don’t ever make the same mistakes again.

The mortgage market that has emerged from the challenges of the past few years is undoubtedly smaller than the one we operated in pre-2007, but its leaner, fitter incarnation is not necessarily a bad thing. It’s rarely a good thing to see businesses fail, but those failures and significant consolidation has actually weeded out many of the rogue elements and irresponsible practices and has left a core of committed professionals.

As the green shoots of recovery become increasingly visible, it is vital we build steadily and don’t desert the sound principles that have enabled us to get back on a sound footing. 


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