[etccarmageddon]

Damien, I remember when we the voters/members were being sold the idea of converting building societies to banks (this was about 20 years ago) - one of the big justifications was "they'll be able to raise money on the money markets in order to lend for mortgages etc which is something they are restricted as a building society"....

I assumed this meant that if they were offering a 3 year fixed rate mortgage then they'd raise say 100million on the money markets as a 3 year loan at a fixed rate and then lend that money to the bank customer at a slightly higher rate - what I didn't realise was that they'd offer the bank customer a fixed rate for 2, 3, 5 years but from money markets which often loaned money for 3 months at a time and during the fixed rate term the money markets money would be at a rate that went up and down.

If I have my facts wrong someone please correct me but the above is how I understand things played out.

So a lot of mortgages out there which run for years and years are depended not on money put in savings accounts at your bradford and bingley's of this world but short term money lend via the 'money markets'.

Money markets are a lot more fussy than your average saver who just wants to stuff his money in an account and forget about it.... when 'the markets' discovered that some prats in america were offering mortgages to people who had no chance of paying it back that's when things started to collapse.

The 'markets' about a year ago got cold feet and didn't want to offer cash to banks who'd clearly lent money irresponsibly.