Loans -
The end of low-cost loans? - 29/02/2008
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Borrowers may find that banks are less inclined to encourage them to take-out high-risk products said the Financial Services Authority.
Hector Sants, chief of the FSA, said: “I don’t think markets are ever going to return to where they were. The idea that at some point they will go back to normal, I think, is a misnomer. The new normal will be different from the way markets behaved in the past.”
For the past several years Banks have borrowed to billions at a low-cost interest rate and their customers have benefited from this. Following the credit crunch customers are borrowing less so Banks are left with their large loans which are difficult for them to refinance.
Sants is calling for Banks to consider changes to borrowing.
"We will be looking for firms to treat their customers fairly in these arguably more difficult times in prospect,” he added.
Banks are more likely to build up a relationship with their clients and meet their specific needs rather then encourage them with complex financial services believes Mr Sants. This may herald the end of cheap mortgage deals and loans.
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