Government must act now

The CML proposals include setting rigid standards for packages of mortgages which are sold on as investments. The new standards would a standardised securitisation structure, with minimum asset quality requirements but without a government guarantee.
At the same time, The Association of Mortgage Intermediaries has appealed to those who oversee the housing market to take urgent action to calm the current turbulence.
In their Quarterly Economic Bulletin, Chris Cummins, Director General of the AMI stated:
"The AMI has met with the Treasury, Bank of England, Financial Services Authority and Sir James Crosby to set out its case for decisive action. We have also spoken to all the political parties as we now believe that political pressure needs to be brought to bear if we are to stop a liquidity crunch becoming an economic crisis.
"The financial position of lending institutions remains one of the main sticking points to the recovery of the mortgage market. Banks are undercapitalised following the large round of write-offs on wholesale instruments and are currently going through the protracted process of rebuilding their balance sheets.
"With capital market liquidity still very poor, funding costs high, and securitisations running at less than a tenth of the levels of recent years, institutions have not got access to cash to grow their businesses."
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