mortgage

As the BoJ and ECB report easing credit standards, the Bank of Ireland has just proposed a new consumer code that includes stricter tests for mortgages and consumer credit. New provisions for housing loans include a 2 per cent stress test on the bank’s standard rate and stricter rules on what will and won’t count as proof of income. Self-certified declarations of income, for instance, would be out.

Another significant suggestion in the mortgage market applies to brokers. Mortgage intermediaries are not currently covered by rules that bind insurance brokers, for instance, to disclose the commission they receive on certain products. The new code would extend this requirement to them. 

Short-term interest rates in the US have turned negative. This might mean imminent disaster or it might be traders chasing safe investments as they look to secure end-of-year profits – choose between numerous explanations.

There are also competing explanations for the rise in US mortgage delinquency rates. Most of the rise is in people who are extremely late on their payments, rather than just a little: 

The IMF has issued a warning about asset price bubbles forming in Latin America, echoing concerns about bubbles in East Asia. As regulators and legislators in the US and UK argue over the best way to prevent another Lehman’s, the US government enters into a new $5.6bn bail-out 

Chris Giles

A Bank of England lending report suggests Britain has not become repulsed by debt. Rather, big companies are looking elsewhere for funds, small companies can’t get credit and the mortgage market returns to relationship banking, writes Chris Giles of the Financial Times