CML asserts real aim of BoE scheme

The Council of Mortgage Lenders has asserted that the Bank of England\'s Special Liquidity Scheme is designed to improve liquidity in the banking system, not to support the housing market.

Michael Coogan, director-general of the CML, emphasised the point this morning in a Debt and Personal Finance All Party Parliamentary Group meeting.

He says: “If it is used widely, as I expect it to be, and extends to over £50bn in asset swaps by banks and building societies, we think that some of that money will be recycled responsibly into the mortgage market.

“However, it was not the bank’s main intention or aim. This possible outcome of recycled funds is also uncertain in terms of scale and timing.”

These comments echo statements from Mervyn King, governor of the BoE, which were made to the Treasury Committee yesterday.