David Seaward
The Payment Protection Insurance (PPI) mis-selling scandal has rumbled on for years. But how did PPI impact loan margins pre-crisis?
This post argues that income from cross-selling PPI substantially offset lenders’ margins on personal loans between 2004 and 2009, and compares the pre-crisis PPI-adjusted margin to loan spreads today.
Continue reading “Bitesize: How much did PPI subsidise personal loan rates pre-crisis?”Mike Anson, Georgina Green and Ryan Lovelock
Montagu Norman was the Bank of England’s longest serving Governor (1920-44) and one of the leading players on the interwar international financial stage. He was a controversial and enigmatic character who pioneered co-operation between central banks.
Continue reading “Bitesize: The travels of Montagu Norman”Will Abel
UK GDP growth slowed sharply at the beginning of this year. Over the same period, Britons suffered through unseasonably cold weather, popularly known as “The Beast from the East”. Are the two related?
John Lewis
How poor has the past decade of productivity growth been by historical standards? Exceptionally.
Continue reading “Bitesize: The past decade’s productivity growth in historical context”
John Lewis
How low are UK real interest rates by historical standards? Using the Bank’s Millennium of Macroeconomic Data, I compute real bank rate, mortgage rates, and 10-year government bond yields over time.
Continue reading “Bitesize: UK real interest rates over the past three centuries”
James Cui and Marcus Pettersson
Shortcomings of the Basel capital framework became apparent in the 2007-8 crisis. One much reviewed and debated issue is that capital ratios can be increased by changes to methods and models for calculating RWA (M&M changes hereinafter) rather than by changes to balance sheets. How have UK banks fared in this respect?
Continue reading “Bitesize: Risk-weight watchers: a probe into UK banks’ capital ratios”
Sachin Galaiya
The interest-only product has undergone tremendous evolution, from its mass-market glory days in the run-up to the crisis, to its rebirth as a niche product. However, since reaching a low-point in 2016, the interest-only market is starting to show signs of life again as lenders re-enter the market.
Continue reading “Bitesize: The rise and fall of interest only mortgages”
Aidan Saggers and Chiranjit Chakraborty
Investment in the Financial Technology (FinTech) industry has increased rapidly post crisis and globalisation is apparent with many investors funding companies far from their own physical locations. From Crunchbase data we gathered all the venture capital investments in FinTech start-up firms from 2010 to 2014 and created network diagrams for each year.
Continue reading “Bitesize: Flourishing FinTech”
Andrew Blake
The so-called ground rent scandal has prompted the launch of a government consultation into leasehold reform. One surprise is just how widespread is the practice of selling newly built houses as leasehold, a practice that seems to have been growing over time. Given that the Land Registry publishes details of all housing transaction since 1995, plotting changes in the pattern of leasehold versus freehold for each type of newly built home is easy.
Continue reading “Bitesize: Are leasehold houses really a thing?”
John Lewis
Proponents of private cryptocurrencies argue they are a better store of value than traditional “fiat” currency. But even if a cryptocurrency’s value cannot be inflated away by large supply increases, that doesn’t automatically mean its value is stable in terms of ability to buy goods and services.
Continue reading “Bitesize: The very volatile value of cryptocurrencies”
