19 Jan

Government announces more help for banks

Government announces more help for banks

The Treasury is announcing a new package of measures today to help underpin the UK banking sector, with the intention of stimulating more lending.

Plans include extending the drawdown window for new dent under the Credit Guarantee Scheme, a new asset-backed securities facility, a capital and asset protection scheme for banks and pushing back the maturity date for the Bank of England's Discount Window Facility that allows banks to swap less liquid assets for those that are more liquid.

One change that may have a very direct effect on mortgages is that nationalised Northern Rock is to no longer pursue a policy of running down its mortgage book, something that could help increase the supply of such deals.

The moves come after a number of stakeholders in the property industry said that more should be done to help increase lending.

Last week Royal Institution of Chartered Surveyors spokesman Ian Perry argued that the government should "provide guarantees for the new issuance of residential mortgage backed securities" to help increase the flow of finance.
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