With banks floundering under the pressure of bad credit mortgages, many consumers have been left wondering just how bad the credit crisis is going to get. Banks in Europe are beginning to feel the strain and banks that many thought were too solid to fail are folding up shop. If you are holding a bad credit mortgage, it may seem as though there is no end in sight and unfortunately, many analysts would agree with these home owners.
Allan Greenspan, the former chairman of the US Federal Reserve stated, “Particularly hard hit will be much of today’s financial risk-valuation system. It will eventually fail and a disturbing reality will be laid bare … It is important, indeed crucial, that any reforms in … the structure of markets and regulation do not inhibit our … safeguards against cumulative economic failure: market flexibility and open competition.”
Vince Cable, treasury spokesman, Liberal Democrats stated, “The longer the credit crunch grips the money markets the more likely it is we will see bank failures and the more serious the repercussions will become on the wider economy. There is now a serious danger that higher costs of borrowing falling on consumers and business will cause an even more rapid slowdown in growth than currently forecast.”
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