Banks and individuals face a tough year, according to the Financial Services Authority.
In its Financial Risk Outlook, the FSA paints a picture of a worsening economy and market turmoil piling the pressure on firms and individuals. It identifies 150,000 risky mortgages where homeowners have borrowed large sums and may now find it hard to meet their repayments – particularly if their cheap fixed-rate deals are due to come to an end this year and they are moved on to a higher variable rate.
Meanwhile, if the credit crunch continues, lenders could find that their business models come "under pressure", the FSA report says. Put simply, this means that some banks and building societies will find it hard to lend and so make as much profit as they have in the past.Reuse content