UK To Act On Mortgage Market

Source : The Straits Times, Sep 9, 2008

LONDON - BRITISH finance minister Alistair Darling is preparing to intervene to stimulate the UK housing finance market, The Times newspaper quoted senior government officials as saying.

The newspaper said Mr Darling was waiting for the final proposals from James Crosby, the former chairman of HBOS, on which he will base his efforts to revive the ailing British mortgage market.

'Key elements in the Crosby report that Mr Darling is considering most closely are those to renew or extend the Bank of England's Special Liquidity Scheme and another to create a government guarantee for high-quality mortgage securities,' it said.

The Times said the Chancellor's proposals were likely to be finalised and presented in the Pre-Budget Report.

Mr Darling was also said to be considering a multibillion plan for the government itself to temporarily guarantee high-quality mortgage-backed securities, helping to create investor demand for quasi-government bonds, aid lenders to sell their loans and boost the supply of finance for lending. -- REUTERS