View more on these topics

Bank chief admitted its lending was “foolish and dangerous” two years ago, says Cable

Liberal Democrat Shadow Chancellor Vince Cable says one of the UK’s top bank chiefs admitted to him two years ago that his bank’s lending practices were “foolish and dangerous”.

Speaking at this year’s Council of Mortgage Lender’s annual conference in London today, Cable said the admission came after a dinner two years ago from the chief executive of one of the banks which is now part-nationalised.

He said: “I had dinner with a chief executive of one of the now recently part-nationalised banks and we argued for an hour about his lending practices. Finally he accepted his bank’s lending was foolish and dangerous, but he would have been sacked by his board if he didn’t lend these mortgages.”

Cable told delegates that mortgage lenders were not the only ones to blame for the current financial turmoil.

He said: “It is easy to point fingers, but the political class are just as responsible for the situation. It has pursued irrational owner-occupier aspirations with ridiculous religious fervour and now the dream has burst very painfully.”

Cable also revealed he would not be one of the voices that will call for banks and building societies to ‘pass on’ any potential base rate cuts this week.

He said: “You will all be faced with the political community instructing you to pass on any interest rate cuts to your borrowers, and you have to with tracker mortgages, but some newspapers will be ringing me up saying: ‘Give us a good, juicy quote, we’ll put you on the front page give these guys a good kicking’.

“I think I have got to the stage where I understand your problem, there obviously is a problem with funding costs. So I will not be one of the people in the queue instructing you to fully pass on the cost, because it’s not the case.”

Recommended

Bright spot

I have never been a big fan of the star fund manager culture. Nor am I a fan of those advisers who perpetuate and accentuate it by posing as quasi astrologers, able to not only identify these gurus but then have the conviction to promote them to the world through their contacts in the media.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com