He recalls as a former local authority treasury management officer, how the LOBO salesmen who pitched these toxic loans were sent away by his director "at the earliest opportunity".
David writes "Having worked for a local authority, a money broker and now an independent treasury adviser, I have seen LOBOs from many angles.
I know that when our brokers and advisers visited me as a junior council treasury officer, the initial low interest rate looked superficially attractive. But I also remember asking what I would be charged for a plain fixed rate loan from a bank, and on finding that it was much more expensive, I gained some idea of the value inherent in those options".
The most damning comment is towards the end
"And in retrospect, I really can’t imagine a local authority treasurer asking for a loan whose rate stays fixed if market rates fall, but whose rate can rise when market rates increase, in what was called a lose-lose situation at the Committee".
Check out my previous posts on the LOBO scandal and most importantly - what can Councils and Housing associations do about it here, here and here.