Back then, how connected to or distant from the unfolding problems in US sub-prime did you feel?
Johan Thijs, KBC Group In August 2007, I was running the insurance group of KBC. When concerns about sub-prime MBS [mortgage-backed securities] issues started to rise, I was totally unaware of [any] potential impact on KBC Group. For the insurance group, the unfolding of the sub-prime MBS problems was remote to us. We were not invested in this type of product.
António Horta-Osório, Lloyds Banking Group In August 2007, I was chief executive of Abbey National, the UK-focused former building society bought by Banco Santander in late 2004. I had been appointed to the post a year earlier.
I remember feeling a sense of unease at the time, given the complacency that was apparent in the markets and in the banking industry in general. The US sub-prime crisis still felt distant at that point, especially for a UK-focused retail bank like Abbey. Having said that, the general thrust of the mortgage market was following the trend set by the US, with greater lending on ‘near prime’ (that is, self-certified and the like) mortgages.
