• ALEX Shinder (Both public and private housing sectors are being whacked, August 5) correctly implicates both social providers and central government for the shortage of social housing, but the banks may also be culpable.

To cut a long story short, financial deregulation through the 1980 and 1990s opened mortgage markets to banks and the ensuing bubble burst in 2008.

While lessons were learned and stress tests introduced, the loan-to-value of the asset (property) is still exposed to the housing market. Banks need a stable or rising market to avoid red ink on their balance sheets.

Alex Shinder’s consternation at government silence on the shortage may be due to the banking lobby asserting that any government foolhardy enough to deflate the market with a social housing programme risks banks looking wobbly under stress-testing and triggering a host of financial ramifications. If this is the case, banks are seemingly too big to fail or too big to nail.

With property assets a significant slice of the banking sector, market intervention seems unlikely in the foreseeable future. And the hitherto union-bashing mantra “holding the country to ransom” comes to mind.

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