Mortgage commentators are calling on commercial banks to help ease the liquidity crisis by committing to lending money to other banks.
Wave director of distribution and sales Mehrdad Yousefi says one of the main problems in the market is that commercial banks, which borrow from the money markets, are not lending to anyone else. He says: “We need a commitment from the commercial banks that they will meet reasonable conditions. We need to get a commercial finance agreement in place to get some normality back in the market.”
Independent mortgage consultant Kevin Duffy says: “I think too many of the banks are overreacting to the situation. Some banks do have capital. Lending at uncommercial rates is better than pulling down the shutters completely.”
Yousefi admits that there is no silver bullet to current liquidity problems but getting an agreement from commercial banks would help greatly.
He says: “The first priority is how quickly the moneymarket rates can be stabilised. I think if this happens by the end of May or early June, we can be very optimistic for the rest of the year.”