Credit crisis means the end of cheap credit
by Kay Murchie
According to the Financial Services Authority, cheap credit may be gone forever.
Hector Sants, FSA’s Chief Executive, said he doesn’t think markets are ever going to return to the way they were before the global turmoil triggered by the collapse of the US sub-prime mortgage market last summer.
Mr Sants said that banks will shy away from the innovative products which allowed them to package and sell on loans cheaply and will instead return to the old practices of getting to know customers and forging long-term relationships with them.
Mr Sants concluded 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 that markets behaved in the past.
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