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“Fear and greed” are responsible for the present financial troubles says Hector Sants, chief executive of the FSA.
He also said that “the level of insider dealing is unacceptable” and called for the FSA to have more powers.
Banks and investors have forgotten the golden rule “don’t buy what you don’t understand” added Hants.
He said that the FSA are now “confident that all banks have the right plans in place” and that the credit crunch was moving into a third phase.
He criticised city bonuses, the level of insider dealing in the City and the fact that senior bank bosses did not understand the complex mortgage instruments that they were selling into the market.
For consumers he does not expect the very easy credit times to return for “years”, and suggested that 100 per cent (and more) loans to value ratio mortgages were “unhealthy.”
Nationwide is cutting the cost of some of its fixed-rate mortgages from Friday of this week.
The building society, which is the UK’s third-largest mortgage lender, will be reducing rates on some of its two and five-year fixed-rate deals by up to 0.30%.
In the case of two-year fixes, rates will fall to between 5.95% and 6.55%. This will be dependent on whether the loan is for a house purchase or remortgage and on the fee attached to the loan. Five-year fixed-rates will be reduced from between 5.85% and 5.95%.
The cuts reflect the fact that money market swap rates, which are used to calculate fixed-rate loans, have fallen slightly.
Nationwide’s decision to cut rates is further evidence that competition is returning to the mortgage market, after months during which products have been withdrawn on an almost daily basis and some lenders actively discouraged new customers.
Alliance & Leicester, Abbey and Royal Bank of Scotland have all trimmed rates across a range of products in the past fortnight.
The Nationwide’s rate cuts for house purchases can be summarised as follows: two-year fixed rate (with £599 fee) available from 5.95% (previously 6.10% with £499 fee); two-year fixed rate (no fee) available from 6.35% (previously 6.50%); five-year fixed rate (with £599 fee) available from 5.85% (previously 6.15% with £699 fee).
For remortgages and additional borrowing: two-year fixed rate (with £599 fee) available from 6.15% (previously 6.30% with £499 fee); two-year fixed rate (no fee) available from 6.55% (previously 6.70%) and five-year fixed rate (with £599 fee) available from 5.95% (previously 6.15% with £699 fee).
Maximum loan-to-value is 90% for new borrowers, 95% for existing Nationwide customers.
