Litigation lawyers are preparing for a picnic against home loan bankers: Robert Gottliebsen
Robert Gottliebsen has said that Australia is going through a credit squeeze without precedent following a period when bank credit standards have been too low.
"The banks have been told to raise those standards, which effectively cuts at least 20% from what they would loan on a property," he wrote in The Australian.
He then added there were also "the unconventional credit clamps... like a cancer growing below the surface, and no one’s talking about them".
Gottliebsen noted that bank managers were under attack at the same time as a credit squeeze - "so a strange new inner fear had developed among banking people at all levels as regulators are set to walk into banks to check what they are doing".
He forecast huge payments set to be made to customers who were wrongly charged.
"As property falls in the light of the credit squeeze, many of those who borrowed from the banks will sue because lending to them was 'irresponsible'.
"It’s true that sometimes high-pressure, commission-driven bank sales people did cajole customers into taking too much debt.
"But the customers accepted risks for big gains. Nevertheless, litigation lawyers are preparing for a picnic.
"Bankers who are confident enough to exercise sensible discretion are hard to find."
