FSA warns more pain to come

first_imgIn its annual Financial Risk Outlook, the Financial Services Authority listed a range of hazards thrown up by the credit crunch, including the strain on banks’ business models and the risk that a ‘significant minority’ of consumers would face problems as a result of their over-indebtedness.It also said there was a danger that consumers could lose faith in the financial system and its regulators as a result of the market turmoil and its effects.Although the regulator emphasised that its report was not a prediction, only an attempt to raise awareness of the biggest problems, it made for gloomy reading.Thomas Huertas, director of banking supervision at the FSA, echoed its conclusions in a speech to a separate banking conference. ‘As bad as things are, they could get worse,’ he warned.Although the interbank rate – the rate at which banks lend to each other – had fallen significantly from its peaks, implying improving sentiment, Huertas said it was too early to be confident.last_img

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