View more on these topics

AMI proposes market looks to Sovereign Wealth Funds

The Association of Mortgage Intermediaries believes the mortgage market should look closer at new areas of funding such as Sovereign Wealth Funds.

In its white paper on credit crunch solutions for the mortgage industry, director general Chris Cummings says the Department for Business, Enterprise and Regulatory Reform must help secure confidence in these funds.

The white paper also states that the Bank of England must finance extra liquidity with a long term focus. It says that a one to two year timescale is insufficient as the industry needs a long term solution.

AMI adds that the industry should look to re-engage with those who historically used to purchase MBS such as Pension funds and Life Offices.

Cummings says: “This white paper sets out a series of possible steps towards addressing the current market issues. AMI has always seen its role as coming up with solutions to problems, and by proposing policy, helping those who must make difficult policy decisions. The alternatives set out in this paper are “green shoots” – we want to build a coalition of the willing across industry, regulation and public policy to nurture them into “sturdy oaks”.

He adds: “It is essential that the market comes together in order to find a solution. To that end we propose a joint approach be made to a carefully vetted selection of Sovereign Wealth Funds with the idea of attracting investment in the UK mortgage market. The group making this approach should be facilitated by The Department for Business, Enterprise and Regulatory Reform, to help secure confidence in Sovereign Wealth Funds.

AMI is also calling for the Government’s Mortgage Finance Taskforce to work with the industry on a “rapid” creation of a new gold standard for mortgage backed securities.

The trade body believes that establishing this on a given date would enable certainty within the market and an ability to re-price lenders’ back books.

It suggests that assets which could not be traded should be managed by the National Debt Office or the BofE.

Cummings adds: “At this time it is important that the regulator stops deterring the purchase of MBS and those who once viewed MBS as part of the investment strategy, should revisit this market with a view to re-entering.

“We strongly feel that that mortgage market has passed the stage where it is able to heal itself and find a resolution to the current crisis that is why we have taken the decision to publish a White Paper calling for outside intervention. If the market carries on as it is, consumers will continue to suffer as the availability of suitable products will begin to dry up and the industry will continue to shed jobs at an increasing rate. This will open up the potential for a shortage of qualified advisers, at a point in time when they are most needed.


Product matters

Not only did David Shapiro put his money where his mouth was when it was announced he would be appointed manager of the newly launched Collins Stewart UK focus fund in February, so did his friends and family.

Introducing Trevor Greetham

Ryan Medlock, Investment Proposition Manager, Royal London Royal London Asset Management’s (RLAM) new head of multi-asset is officially up and running. I want to look at what expertise Trevor brings to the table and how this affects the Governed Portfolios (GPs) and Governed Retirement Income Portfolios (GRIPs). Trevor Greetham joined RLAM in April 2015 from […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm