24 Jan 2012
Clive Stainton, head of risk at Rule Financial, has recently been quoted in a number of news items discussing the differences between Basel III and CRD IV, particularly those that increase the risk of UK homeowner mortgage default. However, Stainton believes the story is actually far bigger than has been reported to-date.
Clive believes that differences between the Basel III regulation and the EU law to enact it (CRD IV), could increase the risk of mortgage default for UK homeowners should they remain unresolved. Furthermore, if CRD IV were to be implemented and become law as it currently stands, it could force some of the UK’s largest banks to jettison their mortgage books entirely as it would render them unprofitable.
It is for these reasons that those affected by the impending CRD IV changes are frantically lobbying the British government to reject parts of the regulation.
If the proposed definitions of 'default days' were to be adopted (proposed 90 days versus the current 180 days in the UK), British mortgage customers, bank shareholders and British taxpayers would all feel the impact. This is primarily a British problem as many European banks already operate within a 90 day default period due to their own national discretionary rules.
Stainton believes that the Bank of England and FSA will support and assist British banks in fighting this legislation in order that the City of London may remain competitive and to support the interests of British taxpayers.
To view the Financial Times article ‘EU plans raise home foreclosure risk’ click here
To view the Money Marketing article ‘Euro directive risks repossession rise’ click here
To view the CNBC Europe article ‘EU plans raise home foreclosure risk’ click here
To view the Mortgage Strategy article ‘Euro directive risks repossession rise’ click here
To view the Clearing and Settlement article ‘Euro directive risks repossession rise’ click here
To view the Express article ‘How EU meddling could force families our of their homes’ click here
To view the Interactive Investor article ‘EU plans raise home foreclosure risk’ click here
To view the CNBC article ‘EU plans raise home foreclosure risk’ click here
