New Year Solutions

A letter to the FT from a colleague engages in the debate which I have mentioned before.

Faisel and the team at Fair Finance have done some great work. Have a look at the maps which claim what they have delivered. A nice bit of transparency that the big fellows could emulate, but of course they won’t.

It would be interesting to extend the argument about affordable lending to the realm of home finance. How much of the current ‘turbulence’ is due to greed in institutions and irresponsible lending to the subprime housing market in the US and elsewhere? Those with 20/20 hindsight consider it substantial.

There are some good ideas, in embryo, out there, see Subprime Solutions by Robert Shiller and Will Hutton’s development of this based on the Crosby Report.

We need to positively build a system of housing provision and housing finance that underpins and supports the general economy.

I can remember being inspired by the construction of an espigon at the mouth of the river in San Sebastian. Its purpose was to protect the beach from being washed away. The initial stages consisted of very large vehicles bringing rocks the size of a small house to the beach where a gigantic crane would lift them and swing them out to sea and just drop them. The corps of observadores, myself included, would let out a huge cheer at this, great fun to watch. The idea, of course, was to build a substantial, immovable, barrier to the floods of the river and the overwhelming power of the Atlantic in the Bay of Biscay.

We need to do the same with our financial systems and we could start with the systems of housing finance.

So, answers on a postcard please to G. Broon Esq. PM

Let’s have some New Year solutions.
Leave the resolutions to the Amalgamated Society of Witterers, Fritterers and Merchant Bankers!