The deal is in addition to £200bn of liquidity that will be made available by the Bank of England for short-term borrowing.
The CML believes the steps address both funding and capital and provide the short-term framework to enable banks to raise finance and the longer term strengthening of their capital position.
It says this should also help to underpin consumer confidence that the tripartite authorities will actively manage the problems of the current downturn in the economy.
But the CML says while both banks and building societies are eligible, the scheme does nothing to help specialist lenders.
CML director general Michael Coogan says: “From what we can see so far, this seems to be a decisive, coordinated and reasonable package of measures that address both the relevant factors necessary to support a return to market stability. The flow of funding to support mortgage lending has been severely constrained, and these measures will help to create more positive conditions for the mortgage market.”
The FSA has also welcomed the rescue package. It says it will now work with banks and building societies to ensure they utilise the measures in a manner that delivers very strong capital and liquidity plans to navigate through the current uncertain economic climate.
FSA chairman Adair Turner says: “The comprehensive package announced today will ensure that our banks and building societies are undoubtedly robust. It should restore confidence to the whole financial system.
“We will continue to work closely with firms, and with our colleagues at the Bank of England and the Treasury, to steer our financial infrastructure through the current global turmoil in good shape to meet the needs of consumers, businesses and society as a whole.”