Ex Bank of England Boss Praises Pawnbrokers

03/03/2016

The National Pawnbrokers Association (NPA) has praised the former Governor of the Bank of England, Lord King, who, this week, declared central banks should act like modern pawnbrokers.

The National Pawnbrokers Association (NPA) has praised the former Governor of the Bank of England, Lord King, who, this week, declared central banks should act like modern pawnbrokers.

 

In his book - which is being serialised in the Daily Telegraph - Lord King wrote of central banks that:

 

“It is time to replace the lender of last resort by the pawnbroker for all seasons. A pawnbroker is someone who is prepared to lend to almost anyone who pledges collateral sufficient to cover the value of a loan”.

 

Lord King used this analogy in respect of central banks:

 

“Before the next crisis it would be sensible to make sure that the banking system has sufficient pre-positioned collateral, including central bank reserved, to be able quickly to raise the funds to meet the demands of fleeing depositors or creditors who had decided not to roll over funding”.

 

NPA Chief Executive, Ray Perry, said:

 

“Lord King is absolutely right – the pawnbroking model is a good fit for central banks. The former Bank of England Governor is also spot on in recognising the merit of the pawnbroking model to ensure rational financial management across the financial services sector”.

 

“The reason pawnbrokers can do what they do is because they lend on an asset, they do not over lend as pawnbrokers pride themselves on responsible lending and our loans are often more affordable than getting a short term loan from a high street bank”.

 

“We encourage retail banks to also see the merit of the pawnbroking model when working with us to ensure a vibrant pawnbroking industry continues to flourish across our country”.

 

-ENDS-

 

Contact

For more information, case studies, or to arrange interviews with Ray Perry, please contact James Watkins at james.watkins@thenpa.com or on 07765803582/020 7936 9496.

 

Notes for Editors

  1. The reference to Lord King examining the role of central banks by considering the pawnbroking model can be found on http://www.telegraph.co.uk/business/2016/02/29/mervyn-king-central-banks-must-act-like-modern-day-pawnbrokers/

 

  1. The National Pawnbrokers Association (NPA) was founded in 1892 and is the trade association representing pawnbrokers, from the large chains through to independents, in a £930m loan market growing year on year.  It is the authoritative voice of the pawnbroking industry in the UK.

 

The NPA stands for expertise, fairness and transparency, professionalism and excellence. All our members are bound by our rules and a customer code of conduct. Pawnbroking is part of the credit industry and is regulated alongside banks and other lenders by the Consumer Credit Act 1974.