Picture the scene beginning of November 2003 - The Treasury
Gordon Brown on the phone to the FSA
"Hello it's Gordon Brown here. I'm just getting on with the job of running the economy, abolishing boom and bust and ensuring that regulation is working. I watched the Money programme on BBC a few days ago and those mortgage brokers were encouraging people to lie about their incomes - are you investigating this?"
FSA - "we don't regulate mortgage yet. You need the MCCB"
GB - "F&CK that - you get down there and speak to them. I want to know how many lenders do not check incomes on their mortgages"
FSA - "There are not many self cert mortgages going on"
GB - "Look plonker did I say self cert? NO. How many are not having the applicant's incomes checked. You know where the applicant lies - a LIAR LOAN"
A few days later
FSA - "It appears that a quite a large number of mortgages are going through with no income checks and they are also lending higher multiples than they used to"
GB - "Right. It is a good job I am a proactive chancellor and not a reactive one. I bet this is contributing to the 30% plus a year rise in house prices. That tw@t Ed Balls and his missus keep telling me it is because of the successful economy and all down to the fact I have abolished boom and bust, but that just sounds bollox"
FSA - "So what should we do? We don't normally get involved until after it has all gone wrong and then we order a review"
GB - "Order a review into lending practices now, I want a meeting with all the lenders. Especially that baldy from Northern Rock and anyone who claims to be in charge at Birmingham Midshires. If we are not careful we will have a mega housing boom followed by a mega housing bust that will destabilise our economy. I better give Greenspan a call because I bet the Yanks are doing it bigger and better than us and that Greenspan talks even more garbage than me"
It could have been so different.