Brace for 90s-type recession: FSA
(LONDON) Britain’s Financial Services Authority has warned the financial services industry to brace itself for the possibility of a downturn similar to the 1990s recession, chief executive Hector Sants said last Saturday.
‘We believe there is a possibility of a real economic downturn here and further continued difficulties in the credit market,’ he told the BBC. ‘If you look at the consensus forecasts, there’s a strong possibility of further declines in UK house prices and this type of scenario needs to be built into firms’ business models.
‘When we come through that, history tells us that’s not something that’s going to play through in months. It’s going to be well through the year-end.’
Asked whether the downturn could be on the scale of the recession of 1990s when the economy took up to three years to recover, Mr Sants told the financial industry to plan for the long term. He said that too much credit had been available to consumers and called for an end to an era of ‘easy money’ if and when the economy picked up. ‘We’re looking to create the environment where there’s the right amount of credit available to consumers.’ - Reuters
Source : Business Times - 11 Aug 2008
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