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BoE piles in cash to boost confidence

The governor of the Bank of England has pledged extra liquidity to the money markets in a bid to re-store market confidence.

Mervyn King made the pledge to MPs at a Treasury Select Committee meeting on 26 March as he discussed the central bank’s inflation report.

He said: “We will provide the liquidity assistance that the financial system needs to restore confidence. Such lending can be only a temporary measure but it can provide a useful bridge to a longer-term solution.”

The BoE extended the range of eligible collateral on its three-month loans in December, January and March to include mort- gage-backed securities.

King confirmed that January’s auction will be rolled over on 15 April, with its size to be decided in light of market conditions prevailing at the time.

King added: “It is unrealistic to assume that markets for many asset-backed securities are likely to reopen speedily or return to their previous levels of activity when they do.”

He warned that the financial crisis had moved into a new phase and said that the heart of the problem was an overhang of assets in which markets had closed on banks’ balance sheets .

He added: “These assets can’t be sold or used to get funding. This creates uncertainty about banks’ financial positions.”


Accord withdraws prime three and five-year fixes

Accord Mortgages will withdraw a range of its fixed rate deals as of close of business tomorrow. These include a range of its prime three and five-year fixed rates and three and five-year remortgage fixed rates. The lender says that replacement products has yet to decide whether to launch replacements.

How confident are you about the future of the UK economy?

The Confederation of British Industry published a sobering report on the economy last week. The CBI lowered its prediction for GDP growth in 2008 by 0.2% to 1.8% and expects even slower growth next year. Its forecast comes on the back of ongoing turmoil in the credit markets. So, this week Mortgage Strategy asks…How confident […]

ECBC to create a covered bond trade platform

The European Covered Bond Council is investigating plans to replicate the telephone-based trade practices that dealers prefer with an online trading system.

What to look for in back office systems

In recent years lenders have made massive strides with their online technology, including decision in principle, application submission and 24-hour case tracking tools. At the same time consumers are increasingly using the internet to shop and transact business.

Keep calm and carry on?

We British are known for our stiff upper lip and just getting on with things. It’s part of our quirky cultural behaviour – like forming orderly queues, or saying sorry when it’s not our fault. Many of us just aren’t that great at talking about what’s bothering us. But if someone feels that the stresses […]


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