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It has been argued that the UK banking system is an oligopoly ( http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8266582/Big-banks-running-an-oligopoly-says-Virgin-Money-chief.html# ) .

market began to slow and consumers began to spend less of their disposable income. Contractors continued building homes and Countrywide continued loaning money (Ferrell, et al, 2013). Accordingly, many homes were on the market for sale with a decreased number of buyers. By late 2007 and early 2008, foreclosure rates were rising and borrowers and investors were dealing with the aftermath of high-risk loans (Ferrell, et al, 2013). New homes sat vacant with no buyers in sighy, homeowners were unable to continue paying, some in part due to increased payments accrued from variable interest rates, and banks were feeling the strain. By 2008, Countrywide accrued over $8 billion in subprime loans with seven percent delinquent, while the industry average was nearly five percent deliquent (Ferrell, et al, 2013). By this time, Countrywide was facing a serious trouble.

people's need for extra funding has led to the extension of credit to large segments of the population who were previously deemed unqualified. However, some lenders have tried

According to the latest figures, small business revenue has increased significantly since the recession, which gives owners selling a business the ability to put a higher valuation on their enterprise and receive more in closing than just a few years ago. The median cash flow and revenue of these businesses has remained strong, giving investors a sense of security when buying a business for a higher price.

During the time prior to the mortgage crisis, the economy was looking good to the mortgage brokers and lenders in the United States as well as new homeowners. After all, it is the ‘American Dream’ to own a

British consumers and credit continue to increase more than a century, with high rates this is putting families under pressure and with the economy heading for a setback due to the Brexit vote. Whilst the wages are slow moving this has added to the low income for families, which is over a million households struggling with the utmost debt, ‘Trades Union Body the TUC and public sector union’.

This work will focus on the broader economic impact of the crisis in credit markets, which began over three years ago with the downturn in United States (US) sub-prime housing market. While the epicenter has remained in the US, it has already had a major impact on the structure of Bank of England. In the year 2008 we have seen a significant consolidation within the UK banking sector. (George

| Economic 1. Downturn in the economy has negatively affected the manufacturing and construction sector – resulting in some clients going out of business, and having implications upon credit insurance 2. The financial system remains vulnerable to setbacks in both the global economic recovery

At the same time, these financial institutions may loosen their credit standards in order to get higher loan market share. As a consequence, their lending decisions were based more on collateral requirements rather than cash-flow analysis. In order to accelerate credit-check procedures for loan approval, many banks transferred the responsibility for loan-risk evaluation from their credit-investigation bureaus to less independent monitoring bureaus reporting directly to the banks’ sales divisions.

This brought first-half sponsor-driven loan volume to $218 billion, up from $111 billion during the first six months of 2006.Given all that’s on the calendar, private equity-related loan volume will handily exceed 2006’s record figure of $234 billion by the end of July. 910 1,270 2,180 2006 1,110 2006 2,340 •Second lien volume has seen a 70% increase year-over-year.2007YTD volume totaled $27.3 billion with the rolling four week average of second lien spreads at 696 bps,versus 704 bps in August. The first/second lien gap widened to 352 bps this week,and is tighter than the 363 bps seen in August. 70% 2007 273 6.96% 7.04% 3.52% 3.63% Market •The number of banks that were active in the retail primary market remained at 77 during the

Bank’s debt structures and amount of loans reported on balance sheets post crisis had changed due to short-term creditors and borrowers. Banks with more deposit inflows reduced their lending amounts on short-term debt. The failure of Lehman Brothers caused banks to reduce their lending because they were greatly affected by the credit line cuts that came with the failure. Another finding on balance sheets was that there was an increase in commercial and industrial loans. However, that was not driven by growth in loans but rather it was increased through drawdowns on existing credit lines. The cause of the decline was due to the failure of Lehman Brothers along with decisions of firms to cut back on expansion plans because of the recession. The decrease in lending wasn’t only affected by the drop in demand but also the decrease in the amount of supply available at banks. Banks that had less access to deposit inflows and a higher threat to credit line cuts took steps to reduce their lending efforts when compared to other banks. (Ivashina et al., 20) Banks saw more changes in lending amounts when tightening of credit standards came into play as well. By tightening

In relation to the increase in house’s price, the rise of financial agreements such as mortgage-backed securities (MBS) and collateralized debt obligations (CDO) encouraged investors to invest in the U.S housing market (Krugman, 2009). When housing price declined in the U.S, many financial institutions that borrowed and invested in subprime mortgage reported losses. In addition, the fall of housing price resulted in default and foreclosure and that began to exhaust consumer’s wealth and

The explosion of the global financial crisis impacted many areas of UK. Because of the uncertainty of the market consumers lost confidence on the economy and households cut spending particularly on manufactured product which leaded to the sharp fall in industrial production

15 Federalreservehistory.org, (2015). Savings and Loan Crisis - A detailed essay on an important event in the history of the Federal Reserve.. [online] Available at: http://www.federalreservehistory.org/Events/DetailView/42 [Accessed 11 Nov. 2015]. 16 Ibid15

Small banks are important among smaller communities because they provide business loans to small business owners, farm loans to local farmers, and mortgages (Pierce & Miller, 2015). The smaller banks can have less stringent qualifications than the established larger banking standards, which allows them to exist. These local businesses, farmers, and home owners are able to qualify for financing at a smaller bank, which they might not otherwise qualify at a larger bank. It is essential to consider the importance of small businesses and how they provide to the economy in terms of goods, services, and employment. Their financial options play an important role in their existence a key reason why new bank charters should not be so restrictive.