"Minister of Finance Jyrki Katainen is calling on banks to alleviate fears that private individuals could be hit with higher interest rates on housing loans.
At a press conference on Thursday, Katainen criticised banking institutions and the Finnish Financial Supervision Authority for not calming fears about banks increasing interest on home loans."
"The uproar began after the newspaper Turun Sanomat revealed banks negotiated a deal with quasi-governmental agencies to allow greater flexibility in loan arrangements for private individuals."
"The procedure was drawn up by the Federation of Finnish Financial Services. It was approved by the Finnish Financial Supervision Authority and the Consumer Agency. These agencies are affiliated with the Bank of Finland and the Ministry of Employment and the Economy respectively."
"So far Nordea, the nation's biggest lender, is the only Finnish bank to include the clause in housing loan contracts. It has been doing so since the beginning of July. However the bank is not allowed to crank up interest rates for at least three years after a loan agreement is signed -- and then only in case of a crisis that threatens the lender's very existence."
Source: YLE
I understand why Bank of Finland, the FSA and the consumer Agency (aren't they suppose to help the consumers???) have acted that way. At the end of the day, in Bank Of Finland, there is the word "bank". Bank on it that will put the banking system - the financial system - before people. Indeed in the long term, people benefits from financial stability.
If something of the scale of 1990 were to happen, (didn't say it will happen), they won't be able to apply the same recipe as the global economy is dire compare to 1992 period. The US is fighting with an amazingly complex and disastrous financial crisis that is putting in doubt the U.S. way of applying "free market" i.e little regulation.
I hope that they will not forget as well to put a clause that says to take back from the CEO, shareholders fatty dividend or generous salaries that they have amassed during good time.
PS: regarding the photo...I just like it. Or maybe it is what a banker sees when a new customer come?
1 comment:
"Representative Barney Frank, the chairman of the House Financial Services Committee, said it would be a ``grave mistake'' not to include limits on executive compensation in the rescue legislation. Speaking on ``Face the Nation,''"
Indeed they will put a clause regarding the executive pay...
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