Having been badly burnt in 2008, Jeremy Lang, manager of the Ardevora UK Income fund, maintained a bias to never trust banks again - until TSB came along.
I have not bought shares in a bank since my experience of watching Bradford & Bingley shares go down the pan in 2008. I thought I was buying a simple UK mortgage bank. I was wrong. I could not see it had entered into off-balance sheet agreements to purchase a heap of US sub-prime loans, which subsequently went bad. Also, like most mortgage banks of the time, it was growing its (visible) mortgage book much faster than its deposit base, and making up the difference via the securitisation markets. When these securitisation markets locked down in 2008, Bradford & Bingley ran out of cash. ...
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