Thursday, November 16, 2006

uk: regulators wants stresstest with property prices down 40%!

it seems that more and more feels uncomfortable with the level of the bubble in the uk. this would be a "stresstest" that deserves the name. i would assume that with a 40% dive in housepricevalues that any major lender will have big big problems...... i doubt that we will see any of the results in the public any time soon. in the meantime the banks are getting more creative to support the bubbleprices and fule the fire.....

es sieht wirklich so aus als wenn es einigen inzwischen mit blick auf den immobilienmarkt unbehaglich wird. dieser test hätte den namen "stresstest" wirklich verdient. bei einem fall um 40% wäre sicher jede bank in großen schwierigkeiten. i denke nicht das wir in absehbarer zeit (wenn überhaupt) die testrusalte zu gesicht bekommen werden. in der zwischenzeit entwickeln die banken immer neue finnazierungsformen um das ganze am laufen zu halten..



more on the uk http://immobilienblasen.blogspot.com/search?q=uk
and the global bubble http://immobilienblasen.blogspot.com/2006/09/bubble-goes-global.html#links

dank geht an mish und sein http://www.markettradersforum.com/

Banks warned of 'end to the good times' http://tinyurl.com/utjvr

The City regulator issued a warning to the high street banks yesterday that the "clouds were already darkening" and urged them to prepare for the impact of rising unemployment and the knock-on effect on bad debts.

The Financial Services Authority highlighted mortgages based on high multiples to income - as much as five times in some instances http://immobilienblasen.blogspot.com/2006/11/five-times-salary-mortgage-offer-gb.html#links- and questioned whether sales of these products would be monitored properly. (plus the 125% ltv loan...) here a link to a bbc audioreport http://housingpanic.blogspot.com/2006/11/bbc-report-on-125-and-five-times.html
(thanks to keith from housing panic http://housingpanic.blogspot.com/ )

.....In a speech to the British Bankers' Association, he also urged them to conduct stress tests - essentially worse case planning scenarios - to assess the impact of a downturn in the housing market on the business. The regulator believes banks should consider the impact of a 40% fall in property prices and a 35% increase in the repossession rate on their business but stressed that it does not mean it expects such sharp movements to take place.

House prices fell about 15 per cent nationwide in 1989-1992, and in parts of East Anglia by 40 per cent, leading to repossessions, write-downs and bank losses.

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