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Andrew Bailey: ‘Banks deserve a thank you’


FSA managing director of prudential regulation Andrew Bailey says banks deserve a “thank you” for the way in which they have helped thousands of borrowers in financial difficulty to avoid losing their homes.

Since the financial crisis, the Government and regulator have pushed banks to employ forbearance measures such as payment holidays, temporary reductions in monthly repayments, temporarily switching borrowers to interest-only mortgages or extending mortgage terms for struggling borrowers to increase their chances of remaining in their homes.

Statistics from the Council of Mortgage Lenders show forbearance measures have reduced the level of repossessions from around 12,700 at the start of 2009 to around 8,500 up to the end of the second quarter of 2012.

Speaking today at the British Bankers’ Association conference in London, Bailey said banks should be applauded for providing forbearance to people who have hit financial difficulties.

He said: “It is easy to imply that forgiveness is a bad thing. Rather, we should deal with the consequences of forgiveness, not prevent it. The reason for that is because forgiveness has a very good side to it, namely that fewer jobs are lost and fewer homes repossessed where it take place.

“And we can see evidence of both of these in the latest recession relative to previous ones. Let me say something unusual now: I think the banks deserve a thank you for the way in which they have sought to use forbearance.”


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There are 27 comments at the moment, we would love to hear your opinion too.

  1. Banks deserve a thankyou? Is he f&*%ing joking?!

  2. Perhaps he should request statistics on how many “forebearance cases” are driven by the fact that Banks realise that they would not be granted possession as the courts would recognise that the lending was reckless in the first place before he starts praising them. I am sure some mortgages may even be regarded as unenforceable in some circumstances

  3. Words fail!

    I believe that they have been so helpful because they are easing their own collective guilty consciences – as well as the fact that they have been “directed” by HM Government and the regulator.

    When you lend 5 times salary and 100% plus on mortgages and/or turn a blind eye to inflated and unrealistic salary statements, it’s small wonder that borrowers find themselves in trouble. A lot of these people shouldn’t have been in a position where they needed to be helped.

    The overheating of the property market is one of the cornerstones of the mess we are in today.

    Thank them? Tcha!!

  4. Hector Sancts re-incarnated. Where has this man been the lart 5 years-Wullie Wonka’s chocolate factory.

    This is obviously a sign of what is to come.

  5. “the Government and regulator have pushed banks to employ forbearance measures”

    I’d suggest three alternatives:
    -Mr Bailey has been drinking
    -He just found out he’s not being kept on and it looking for a job with a bank.
    -He needs a man in a white suit and an outfit with straps on the arms (and I’m not talking something out of 50 shades!)

  6. Nice try Andrew but no cigar!!!
    The banks had and still have a vested interest in not dumping a pile of Repos on the market and getting a well below market price for them—that would really ramp up their crystallised losses.
    The real test will come when they think that they can get their money back safely when (or if) the market is recovering—I think that their true colours will be shown at that juncture

  7. Yes, these banks are the new benevolent institutions of the UK economy. Is this guy for real?

  8. You seriously couldnt make this up.

    It really illustrates how the bankers managed to get away with the mess they made relatively unscathed!

  9. has he forgotten how it all started?
    Idiot !!

  10. Who is this idiot?! What an absolutely stupid thing to say. The whole situation is due to the banks throwing money at people who simply couldn’t afford it.

    The banks do not deserve a thank you! The Government and Regulator have pushed banks to employ forbearance measures. The banks certainly wouldn’t have been as leanient or sympathetic to struggling borrows otherwise!!

    This statement is a joke.

  11. Banks do get bad press, and rightly so for much of their past performance. However, over the last couple of years they have gone out of their way to ensure repossessions have been kept to a minimum – partly due to pressure from the FSA.

    What puzzles me is how little is said about the people who took out the home loans, taking on payments which were out of their reach and who did nothing to provide themselves with financial products that could help in change of circumstances. The consumer has a responsibility in this too.

    Has previous commentators had a bad experience with banks? I can honestly say that my own experience of banks, and mortgage lenders, have been excellent. I put my money in and take it out anywhere in the world with a bit of plastic – amazing!! I don’t expect high interest on savings – why would I? (Indeed, I save in better areas). On the occasion I have needed to use my agreed overdraft, charges have been minimal. A friend of mine regularly exceeds his overdraft and is amazed when he is charged?! What does he expect?!
    Yes, I do think banks, or anyone else, should get some praise for improvement. Try asking the poor cashier or bank clerk if they are amused about the rhetoric or bad press the banks have been getting when they go about their daily routine.

  12. Ha Ha – this is the biggest joke of them all! Only in this mess because of them….time to get a new job Mr Bailey.

  13. what a knob !!! the rest of us in this profession are jumping through hoops to pass exams and comply with the RDR and trying to see our clients investments are not further damaged through continued volatility brought about by the habitual poor management of the worlds banks and this is the best he can come up with, wake up sunshine and take a good look around you and then come up with something a little more reassuring to us, you guys are just so out of touch with what is happening out here at ground zero that it is frightening !

  14. Listen to all you people on here! Get a grip! its all the big bad banks fault!! stop it. Some of the nonsense spouted on here makes me laugh “reckless lending” 5 times salary” “banks throwing money at people who cant afford it”. Yeah thats right the bank dragged people in from the street then put a gun to their heads and forced them to take money/borrowing they could not afford!! Its all the banks fault! get a grip where is individual responsibility?!?! If you cant afford 5 times your salary DONT TAKE IT!!! and if the big bad bank “throws money at you”…..guess what? DONT TAKE IT!!!! typical of the current society “its everyone else’s fault” the bank made me take it!!! get a grip.

  15. OMG Ty to the banks
    You cannot be Serious
    FSA Managing Director of prudential regulation (cant stop laughing) can it get any worse…….
    The Lunatics are Definitely running the Asylum.

    Freakin Furious!!!!!!!!!!

  16. Two points:

    1. No one forced people to over extend themselves chasing the dream of being an home owner
    2. As is rightly pointed out it is unlikely that a repossession order would be granted unless the bank has shown that they have tried to help the borrower

  17. What planet is this guy on? Banks put us in this situation due to Bonus culture & greed. The only reason that they have not acted is because the Government has told them not to. This combined with the fact that if they did it would affect their inflated balance sheets. Thus leading to less profit & reduce their overpaid BONUS. Now Bonus theres a word. Don’t the FSA get lots of those for failure on a mass scale as well? Oh back to banks again… God help us if this is the voice of the regulator. Off to find a bar as no point working in this industry and better than jumping off a bridge!

  18. Having sat through repossession proceedings with a couple of clients recently this guy really is in la la land.

    Lenders are quite happy to ignore the England and Wales pre pocession protocol, the courts are not really interested in the proceedings, don’t understand what capitalising arrears is all about, have no idea about juristiction resting with the FOS for complaints being heard and the FOS are quite happy to defer back to the courts.

    All the lenders want is to be granted their possession order so as they can sit on it and wait for property prices to move upwards.

    You can try talking to the banks and they will listen but only if it is listening on the banks terms!! To top it all they would rather try and bully a borrower rather than have to talk to an IFA or some one else who knows what they are talking about.

    All part of the service – but then I’m sure the MAS will pick this up and crusade with the same vigour for our clients when we are all gone.

  19. Such vitriol from most commentators… without even knowing the financial circumstances of possessions cases, the assumption is that all possession actions must be as a result of mis-selling by banks.

    CAB/Shelter research based evidence (2009) show that over 2/3rds of all possessions cases are a result of borrowers’ changed income levels, and less than 10% are due to lender/borrower over-estimation of ability to repay.

    But reality plays no part in the lives of the morally outraged. Of course, these self-same moralists jump on any passing band-wagon with over-excited zeal, partly to hide their own short-comings and lack of morals.

    You’d think that readers of a financial services magazine would show some sense of balance. Sadly, they merely reflect the tabloid-reading majority.

  20. Is he being paid by the banks to try and get them some positive press! I am not sure where this bloke has been over the last few years but the banks dont deserve thanks, they should be answering serious mis-conduct issues and possibly jail sentences! In my humble opinion!!! Allegedly!

  21. What a plonker!! He must be forgetting that the governemnt made a big political deal of “stepping in” to stop banks being too aggresive early on and even the FSA have reprimanded banks for arrears mis-handling.
    What a total nitwit, how can we hope for a better future with this idiot at the helm?

  22. @Anonymous | 17 Oct 2012 11:26 am
    As usual, there are several posters who act as apologists for the banks, but you are dead right. Some of them do not even follow the compulsory procedures for arrears handling and repossession processes.

    The banks are cynical in the extreme and the reduction in repossessions has more to do with more than three years of low rates.

    I personally believe that one of the few good things the FSA have done is to highlight and reduce mistreatment of mortgage debtors and they should be given credit for this, so it is really bizarre that Andrew Bailey is trying to pass that credit on to the banks.

    As has been said, it will do wonders for his future job prospects, but I cannot see any other reason for this apart from a bit of positve reinforcement (the carrot after the stick).

  23. When the bank’s have replaced all the share value they gambled away, when the bank’s pay back all their fraudulent bonuses, when the bank’s apologise for making the most of the working population work an extra 5 years, when the banks have finished compensating most of the PPI clients they fleeced ( many not all) when the bank’s start lending to businesses at realistic rates, when the bank’s have stopped piling up their variable mortgage rates…when any of this happens, Andrew Bailey might have made a start, as it is…he is a waste of space looking for a job he CAN do

  24. As the earlier post correctly points out, if many of those cases reached the court for possession the files would reveal that the mortgage should never have been granted in the first place. Dodgy brokers, meddling BDM’s pushing underwriters to sanction applications, lying public and branch staff pushing through non affordable applications. Inflated salaries, apparently all overtime and bonuses guaranteed of course.

  25. I think this is they guy who forced Bob Diamond out. So, just saying.

  26. You couldn’t make this stuff up. It is the stuff of nightmares, the loonies very definitely are now in charge of the asylum.
    Absolutely pathetic.
    Speak to anyone who has lost their home. Such actions by banks should be illegal and if someone defaults on their mortgage because they got chucked out of a job as a consequence of the cut backs, they should be allowed to assign the asset (home) to the bank, receive a credit of the equity and pay rent, that rent of course could be funded by the taxpayer as a social benefit in any event.

  27. Better to get the pain over quickly, instead of dragging it out for a decade. Repossess, get it out of the way. Realistically there is no way a lot of mortgages are going to be repaid. Especially when interest rates finally rise and the economy is allowed to recover.

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