Fixed income set up caused crunch

Axa Fram's Mark Tinker believes credit crunch issues lie with lenders rather than borrowers

US sub-prime borrowing was not entirely to blame for the credit crunch, according to Axa Framlington's Mark Tinker. Speaking a year since the crunch, he believes it had very little to do with the US housing market and sub-prime borrowers. Instead he blamed the structures of fixed income coupons. "The problem is with the lender not the borrower, with mortgage borrowing shifting risk to fixed income," he said. "The threat of a potential recession will be driven by the velocity of the circulation of money while regulation will fail to generate a return on capital." Tinker, who runs t...