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Cable says Govt to blame for borrowers saddled with debt

Liberal Democrat Treasury spokesman Vincent Cable is calling for the Government to push for more responsible lending from providers to prevent borrowers being saddled with unsustainable debts.

Cable told the LibDem conference in Bournemouth this week that he blames the Government for failing to prevent lenders offering big mortgages to borrowers who may not have a sufficient understanding of the impact of interest rate rises or a fall in house prices.

The LibDems want banks and building societies to donate 0.1 per cent of their profits to the Citizens Advice Bureau, which Cable says would generate around £27m towards the provision of generic financial advice thr-ough the CAB.

Cable wants to see bank and society chief executives, shareholders and senior managers put some of their profits back into the community. He believes Chancellor Gordon Brown is taking serious risks by relying solely on interest rates to achieve a soft lan-ding for house pri-ces. He accused Brown of creating a new economic world in seven days and spending the last seven years admiring his creation.

Cable said: “Thousands of people are trapped in unsustainable debt and 85 per cent of this is directly linked to house price inflation. The bubble in the market will not necessarily burst but we could face problems of negative equ-ity if it does and where are the safety nets for borrowers?”


Put trust in straight talking

A fter five years of distinguished service, Paul Smee is off. IFAs will be losing a very skilled operator and a well respected problem solver. Paul&#39s style could not have been more different to mine but in one way we are very similar – we both tell it straight. Not doing so all-ows ministers, civil […]

L&G axes Rock deal to quit equity release

Legal & General is pulling out of the equity-release market by ending its white-labelling arrangement with Northern Rock. The firm says it no longer wants the product in its mortgage range because of confusion over the product and Northern Rock&#39s own product. L&G has been white-labelling the equity-release product through Northern Rock-owned L&G Bank for […]

Regulation reminders

Film buffs out there will remember Hitchcock&#39s The Lady Vanishes. It has one of the most praised scenes in film history showing how quickly time passes. It reminds me a lot of the mortgage market at the moment. To help finalise your preparations for regulation, it is useful to review the new business process. The […]


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Europe outlook: Greek gridlock and Italian banks

By Rob Burnett, Investment Director, Head of European Equities As investors await a resolution of Greece’s repayment difficulties, we anticipate a period of consolidation in the European market over the next few weeks. Our base case is that the Greek government and the European Central Bank (ECB) will come to a solution, particularly given the […]


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