Credit crunch 'to last into 2010'

The credit crunch is likely to last well into 2010, the head of the UK's largest mortgage provider has warned.
HBOS chief Andy Hornby told the BBC it would take 18 months before US house prices started to rise again.
That was needed "to give the confidence back into the system for banks to start lending again," he said.
His comments suggested there was little that the UK Government could do to stimulate the markets, the BBC's business editor Robert Peston said.
'Confidence needed'
Mr Hornby - whose bank owns the Halifax and Bank of Scotland - said British banks would continue to suffer major problems in offering loans until they could once again raise significant sums on wholesale financial markets.
It (the credit crunch) will take a long time to play out
Andy HornbyChief executive, HBOS
About two-thirds of wholesale funding received by UK banks comes from overseas - primarily from the US.
And the HBOS chief said that US money-market investors would not resume channelling of money to UK banks for mortgage-lending until US house prices started to recover - a process he said was set to last well into 2010.
"My personal view, for what it's worth, is that it will take 18 months to play through the system," Mr Hornby told our business editor in the latest of his Leading Questions programmes.
"It's going to take 18 months before US house prices have started to rise again - which is what's required for banks to have the confidence to start lending again.
"It will take a long time to play out."
Too dependent

Mr Hornby also implies that there's little the government can do to restore positive momentum to the economy
Robert PestonBBC Business Editor
The assessment of the HBOS chief implied that the government could do little to persuade UK banks to start providing more normal amounts of loans to homebuyers and businesses, our business editor said.
"Since it was the reduction in the availability of credit that precipitated the economic slowdown in the UK, Mr Hornby also implies that there's little the Government can do to restore positive momentum to the economy."
Many argue that the prime cause of the credit crunch in the UK was that banks had become too dependent on selling their mortgages to global investors in the form of mortgage-backed securities.
So the sudden unavailability of these deals deprived UK banks of much of the finance they needed - something which led to the eventual nationalisation of Northern Rock.
Many banks have taken efforts to shore up their balance sheets during the credit crisis.
HBOS raised £4bn in a rights issue, but largely from underwriters after the majority of shareholders snubbed the deal.
It also saw profits before tax fall 72% in the first six months of 2008 against the background of the crisis and a tougher economic climate