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IMLA supports £37bn rescue package

The Intermediate Mortgage Lenders Association executive director Peter Williams has welcomed the Government’s dramatic £37bn rescue package of British banks.

During a recent interview Williams says although the rescue package is “small” in terms of helping homeowners, the move is “hugely significant” to the banking sector.

He says: “The pace with which that moved from being an idea to being a reality suggests the pressure that all the major banks are under in terms of share prices and their inability at present to raise adequate capital. £50bn is the kind of sum that people are looking for and this just shows the scale of the issue. It also shows the way that the UK is addressing it differently than the US.

“Here the intention is not to use the money as a mechanism to put capital into banks, but to go directly to the banks and take an equity stake. It’s not quite nationalisation, but it is providing banks with the capital that they need.”

Williams says the bailout begs the question over role of the Bank of England during the financial meltdown.

He says: “In all of this there would be continuing concerns about the role of the Bank of England has played. Compared to other banks globally the Bank has been rather reactive than proactive. It has been rather cautious and somewhat conservative and in some senses been seen to be narrowing policy options rather than helping widen them.”

While Williams says he is not sure when things will “bottom out”, he has reassured UK homeowners that they will not suffer more than their US counterparts. Williams also supports the base rate cut, though he says: “It was overdue and it probably could go deeper.”

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