BSA warns over Northern Rock U-turn
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The BSA has been a loud dissenter regarding the potential of Northern Rock’s unfair advantage in the market, thanks to its Government backing.
It has recently written to the European Commission airing its concerns and now says the decision to halt the deleveraging and begin lending could lead to other lenders losing out.
BSA director general Adrian Coles says: “Northern Rock bank has today announced that it is slowing its rate of mortgage redemptions. We await its detailed plan, but would have concerns if Northern Rock bank were to aggressively increase its lending, particularly if this was to be funded by retail savings - a market in which we are already concerned about unfair competition from Government-backed entities.”
Northern Rock has confirmed that it will make sure more existing customers will be able to stay with Northern Rock, but could not confirm if it would be returning to higher volumes of new lending.
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