22
Jan
Expert tips lending to increase
There is a good chance that the latest government moves to help the
banking crisis will enable them to increase their lending, an
expert has commented.
Managing economist for the centre for economics and business
research Ben Read said that "toxic debts" represent the "root"
cause of the credit crunch and that the latest package of measures
announced could help to dispose of these.
He added: "That also creates a level of trust between the banks
that a lot of these toxic debts are off their books [and] that is
likely to boost lending."
Such a development could be good news for those looking to move
house or get on the ladder for the first time, as it could see more
mortgage lending take place.
The package unveiled this week includes an extension of the
maturity date for the Bank of England's discount window facility -
in which less liquid assets are swapped for greater liquidity - a
protection scheme for capital and assets plus a new asset-backed
securities facility.
Another aspect of the plan is for Northern Rock to provide more
home loans instead of running down its mortgage book.
