Sat Jan 19th, 2008 at 11:58:09 AM EST
It's probably been remarked upon here before and I missed it but a recent article Lenders to rely on Funding Models tells us that despite the Northern Rock fiasco lenders are going to continue to rely on wholesale funding.
My question is: do they have any choice?
Or is another symptom of the Anglo Disease the fact that the retail depositor is a dying breed, and that the people in whose hands wealth is concentrating don't tend to have a deposit account with the Chipping Sodbury Building Society?
I find this an interesting and depressing comparison.
The group said UK lenders had traditionally used savings deposits to fund their mortgage business, but raising money through the wholesale markets had become increasingly popular in recent years.
It said during 2000 wholesale markets accounted for an average of just 27.8% of all funding, but by the first half of 2007 this had nearly doubled to 47.8%.
Scratch my head as I might, I really cannot see any way - in the current paradigm - how this trend could be reversed.....