Oh Dear . BOI Loses some mortgage 'funds'

They are forced into what Citi ( yeah I dig the irony Citi 8) ) very elegantly calls:

****“Involuntary Asset Growth” ****

Now Involuntary Asset Growth is where the credit crunch meets our mortgage market, it is what happens when banks can no longer securitise like they used to.

Therefore they cannot LEND like they used to and BoI were a lot of our rather large mortgage market, do I hear 15% anyone ???

ftalphaville.ft.com/blog/2008/01 … h-in-2008/

And its only a guess, no banks are forthcoming on hard stats .

https://alphaville.ftdata.co.uk/lib/inc/getfile/666.jpg

This means that all other things being equal , BoI will lend less this year. They could, however , retrench from Uk BTL mortgages . Ya never know.

And you know how they reduce lending?

They put up their rates.

ehh not entirely

the rate rise to make the same money on less lending (and they will reduce deposit rates too ) .

go back to yeer credit unions people , flEEEEEEEEeeeee

Actually I would expect deposit rates to begin increasing. They will be increasingly reliant on this source of balance sheet growth. However, that will come after a period of adjustment as banks try to close out what are now loss making elements of their business.

The most ‘ironical’ aspect of Citi saying this is that most of the involuntary asset growth has come from banks having to pull SIV and other conduit assets back onto their balance sheets. Citi itself has turned into the Mr. Creosote of the asset world with its brown ale and quails eggs RMBS giving it severe indigestion. Despite the middle eastern maalox, a wafer-thin mint is all it’s going to take!

Anglo Irish Bank increased their deposit rates last week. They offer 5% for any amount if you leave it in for 1 year. This seems to be the highest rate for large lump sums. I reckon Anglo are trying to improve the amount of retail deposits they have since the money markets seized up.

RBS or First Active/Ulster Bank as they like to be called in Ireland are also offering competitive rates
firstactive.ie/savings/index.asp

Nobody is offering 5% on unlimited balances like AngloIrish.
First Actives 5.22% only applies to the first 15k, and their 7.15% rate is limited to 1000/month.

Anglo Irish is trying to lure depositors into locking in for a whole year because cash will be very scarce in 2008.

One other point is that a bank the size of Rabobank is not even listed on that chart! Do Postbank have a larger securitization business than them?