Tuesday, September 30, 2008

Irish Financial Markets - who's to blame?

Much of the commentary on the current crisis in financial markets is badly ill-informed e.g. there is very little similarity between the US sub-prime market and the Irish mortgage market.

Everyone seems happy to blame the crisis on the greed of the banks. That allows us, the great unwashed, forget about our own greed – who was it again who was going to be the major beneficiary of ever-rising house prices?

The government is more than happy to allow banks to take the blame. But who was there priming the pumps with tax reliefs/special schemes for first-time buyers (who were mainly investors!), investors and property developers?

Politicians (e.g. PDs), media commentators (e.g. Shane Ross) etc all shouted for more competition in the mortgage market. Enter HBOS (and motor-mouth Mark Duffy) giving 100% mortgages – all the domestic lenders are forced to follow suit, some to a much greater extent than others.

There’s plenty of blame to go around, so let’s share it out on a more equitable basis: the Government, the banks and the borrowers all need to share the load.

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