Banker warns on private borrowings

The ratio of private borrowing to GNP has risen to a dangerous level, a former deputy head of banking supervision of the Central Bank has warned.

Writing in February's edition of Finance, Mr William Slattery points out that, at the end of 1999, private sector credit was set to reach £90 billion, or 120 per cent of national income.

A continuation of recent rates of growth in credit would see this rise to 200 per cent by 2002, an exceptionally high figure by international standards, he says.

A return to more normal levels of credit growth and builders' profits would mean a substantial drop in house prices, he adds.