17 Oct

Financial system 'past danger point'

Financial system 'past danger point'

The doomsday scenario of the world financial system collapsing can now be ruled out after widespread government interventions around the world, the chairman of the Financial Services Authority Adair Turner has commented.

Lord Turner told the Financial Times: "I think we are past the point of the danger of where we were last week, where we could have had a fundamental systemic meltdown of the core plumbing of the world financial system."

Such a situation could mean that the recovery of the banking system will now pick up speed, with the result being improvements in liquidity and confidence, with lower interbank lending rates and more mortgage finance becoming available.

Earlier this week Nationwide and the Co-operative Bank both announced they were lowering their mortgage rates in response to the recent base rate cut.

Nationwide said it was trimming 0.3 per cent off its fixed-rate deals, while the Co-operative Bank will pass on the full 0.5 per cent.

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